‘No plans to cap domestic economy, business air fares’

The Government has no plans to cap economy and business class airfares charged by domestic airlines.

Mahesh Sharma, Minister of State for Civil Aviation, told the Rajya Sabha in a written reply on Tuesday that the Government is not considering the formulation of a mechanism to cap economy and business class airfares to curb predatory pricing of passenger tickets by airlines.

“Airfares are not regulated by the Government. Airlines are free to fix tariffs under the provision of Sub-rule (1) of Rule 135, Aircraft rules, 1937, having regard to relevant factors including the cost of operation, characteristic of services, reasonable profit and the generally prevailing tariff,” the minister said.

There have been calls from various quarters, including from Members of Parliament, for some mechanism to control skyrocketing domestic airfares, especially for those who have to finalise their travel plans at short notice. Interestingly a recent study of domestic airfares undertaken by the Directorate General of Civil Aviation (DGCA) on airfare movements in 2014 showed that the average ticket price during peak demand seasons was closer to the minimum fare.

“The average fare is closer to the minimum fare being offered by the airlines, indicating that most of the tickets sold by the airlines are not at an exorbitant price,” the study said.

However, worried by demands from various quarters, in June this year, the Ministry of Civil Aviation asked the DGCA to conduct a detailed study of airfares charged by domestic airlines on high-density routes during the past five years. DGCA sources said that the exact routes were being looked into as the number of high-density routes has increased with more carriers starting operations in the last five years. Generally, any route on which airlines offer multiple daily connections is considered a high-density route.

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