DGCA asks airlines to be reasonable, transparent on airfares

Saturday, December 4, 2010

NEW DELHI/BANGALORE - Aviation regulator, Directorate General of Civil Aviation (DGCA) Saturday said the airline industry should be reasonable and transparent on the air fare pricing issue.

“We have asked the airlines to be reasonable about their demands and to be transparent about their bucket seats,” said newly-appointed DGCA director, E.K. Bharat Bhushan after a meeting with leading low cost carriers (LCCs) in Delhi.

The meeting between officials of the DGCA and the civil aviation ministry and private airlines represented by SpiceJet came a day after the Civil Aviation Minister Praful Patel warned the airlines against predatory pricing.

According to an official, the DGCA made it clear to the private airlines that they have to declare the maximum air fares per sector in the public domain which is in accordance with the air transport rules.

However, Kingfisher Airline’s chairman Vijay Mallya said the issues was being hyped by the media and that in reality, passengers pay far lesser than what is being portrayed.

“Media has created a controversy. You have taken the highest band that exists now, comparing it with the lowest band several months back. People pay much lesser than these prices even during peak season,” said Mallya in Bangalore.

According to him, bandwidth pricing practice is followed all across the world and that airlines prices should not be compared as they are commercial commodities.

“Bandwidth pricing is followed all across the world. How can the prices be compared? (An) Airline is a commercial commodity,” he added.

Patel Friday rejected a proposal by domestic airlines for a massive hike in air fares and said an economic advisory council would be formed to look into tariff-related issues.

“We have decided and put in effect immediately the establishment of a Civil Aviation Economic Advisory Council,” he said.

Patel said the industry should justify the exorbitant increase in prices and that the passenger should come to know the prices on a day to day basis.

“If the fare is Rs.10,000 today and it becomes Rs.20,000 tomorrow, what is the earth shattering reason behind it. There has to be some justification from the airlines,” he said.

He said the economic advisory council would be notified by Monday and its first meeting will be held Dec 10.

In the past few weeks, the regulator received complaints about airlines charging exorbitant rates for last-minute bookings, sometimes as high as 200 percent of the normal fares. Routes like Delhi-Mumbai, which accounts for 70 percent of the total domestic air traffic, saw ticket prices shoot up significantly leading to an uproar from consumer forums and passengers.

As a result, the regulator had issued notices to several airlines on ticket prices and asked them to submit their replies by Dec 1.

Filed under: Economy

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