DGCA to keep eye on air fares

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New Delhi | Updated: March 14, 2015 10:38:35 AM

Aviation regulator DGCA has decided to keep an eye on air fares to check any "exorbitant" and "predatory" pricing by the domestic carriers.

DGCA, air fares, DGCA air faresThe government has time and again maintained that the fares are always market driven and it cannot regulate them. Reuters

Aviation regulator DGCA has decided to keep an eye on air fares to check any “exorbitant” and “predatory” pricing by the domestic carriers.

The Directorate General of Civil Aviation (DGCA) has asked the airlines to provide the quantum (percentage) of the tickets sold by them at different pricing levels (highest and lowest fares buckets) for each sector over the next few months, sources close to the developments said.

The data collected would be anlaysed for any “noticeable” trend and consequent action, they said.

“Airlines have been told by the DGCA to furnish the data (on the highest and lowest fare buckets) in each sector. We will see (monitor) the data for 2-3 months and then we what best can be done,” a source said.

However, various flash sales offers which were announced by airlines from time to time, have been kept out of this monitoring process, they said.

The government has time and again maintained that the fares are always market driven and it cannot regulate them.

However, late last year, the civil aviation ministry had circulated an internal note, suggesting for a minimum and maximum threshold for the economy class fares.

Under the existing regulation, airfares are not regulated by the government and airlines are free to fix reasonable charges/fee subject to compliance with Aircraft Rules 1937, Minister of State for Civil Aviation Mahesh Sharma had recently said.

The note said “Airlines have been offering huge discounts due to intense competition. If the situation is not contained, some airlines may face closure in the near future.

“Therefore, steps may be taken to fix minimum airfare to be charged by each airline.”

“There is a need to cap maximum economy class airfare at a reasonable price of about Rs 20,000 beyond which airline should not be allowed to charge, exploiting passengers’ urgency for travel due to various reasons,” the note had said.

In a written reply in Parliament, Mahesh Sharma had earlier this week said, “Under the existing regulation, airfares are not regulated by the government and airlines are free to fix reasonable charges/fee subject to compliance with Aircraft Rules 1937.”

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