Spicejet critical of proposed changes in cancellation charges

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New Delhi | Published: June 23, 2016 7:59:00 PM

In a vield criticism of DGCA's proposed move to fix lower ticket cancellation charges and a nearly five-fold hike in denied boarding compensation...

Aviation in India will grow only if all stakeholders were able to constantly work to reduce the cost of aviation. (Reuters)Aviation in India will grow only if all stakeholders were able to constantly work to reduce the cost of aviation. (Reuters)

In a vield criticism of DGCA’s proposed move to fix lower ticket cancellation charges and a nearly five-fold hike in denied boarding compensation, SpiceJet’s CMD Ajay Singh today said such issues should be left to the airlines and their customers.

“Sometimes different elements of the government work at cross purposes. As long as the airline makes it clear to the passengers at the time of buying tickets as to what the cancellation charge policy, then it is the contract between the airline and the passenger.

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“That should not be interfered with by any other authority,” Singh said at an event here.

He said that any increase in fuel prices, airport fee or levying of transaction charges only enhances an airline’s cost.

Aviation regulator Directorate General of Civil Aviation has early proposed a raft of passenger-centric measures including to fix cancellation charges not more than the base fares as against around Rs 2,000 being charged by domestic carriers across the board and reducing the extra checked-in baggage fee.

“We believe that services need to be unbundled and we believe that people should pay only for actually what they subscribe to. If somebody wants to travel without luggage, then he should have the benefit for not carrying the luggage,” he said.

Singh said that India is a “price sensitive” market and there is a need to bring down the cost and make airlines profitable.

“The 20 per cent growth is the direct consequence of the reduction in air fares from last year to this year. That must continue if we want to see this sector growing,” he said.

India has been the fastest growing aviation market in the world with domestic passengers travel demand spiking 20 per cent in the last fiscal.

This growth has not come because of the opening up of the sectors and other issues which are being talked about, he said, adding it will grow only if market is stimulated.

“We have to stimulate (demand), bring down costs and fares. We have to stimulate this market with low fares,” he said.

Aviation in India will grow only if all stakeholders were able to constantly work to reduce the cost of aviation, he said.

Singh, who is one of the members of airlines’ body Federation of Indian Airlines which had vehemently opposed certain provisions including on 5/20 norm in the draft aviation policy, said that his airline would work to ensure that the approved policy is “implementable” and not just a “policy on paper”.

Existing airlines felt that it was discriminatory when they have been asked to follow the 5/20 norm and they had felt that new airlines should also be asked to follow it,” he said.

“We believe that ultimately the policy should strengthen indigenous aviation to ensure that we build hubs within the country and we do not export our hubs to the Middle East and South East of Asia…. So we believe that work needs to be done by the government to keep strengthening indigenous aviation,” Singh added.

On the issue of substantial ownership and effective control at Indian airlines, Singh said such issues must be dealt with reciprocity and it cannot be that other countries do not not allow Indian companies to own and effectively control airlines, “whereas we allow them to do the same”.

“SOEC norms remain and airlines which are supposed to be substantially owned and effectively controlled by Indians will” remain so, he said.

The requirement of SOEC comes up at two places– for grant of AOP to an Indian citizen and at the place where India has to grant bilateral rights.

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