Air fares have to be within pre-notified bands

Civil aviation minister Praful Patel on Thursday asked airlines to price fares in pre-notified “bands” and avoid any kind of predatory pricing.

“Fares on lower and higher price band on every sector will have to be notified. It has to be in the public domain on each airline’s website on what would be the fares on higher price band,” Patel said at a Ficci event here.

Warning erring airlines, he said the government and the Director General of Civil Aviation (DGCA) had taken serious note of ‘exorbitant prices’ being charged on most routes in the last few days.

“DGCA has already sent notices to airlines ... it can invoke special powers if required .... it will discuss with airlines on ways to regulate fares in low and high bands.”

Patel’s comments follow reports that spot bookings on certain routes including Delhi-Mumbai have soared to as high as 300% after Diwali.

DGCA had issued a circular last week, asking the airlines to ‘furnish a copy of the route-wise tariff across its network in various fare categories, in the manner it is offered in the market, to DGCA on the first day of every calendar month’.

According to the circular, any ‘significant and noticeable change’ in the established tariff already filed (by an airline), should be reported to the DGCA ‘within 24 hours of effecting such changes’.

The regulator had also asked airlines to publish air fares on their websites or in daily newspapers on a regular basis.

But aviation experts differ with the minister’s views. “I don’t think the government should intervene. There would be days when the pricing would look threatening, but most days the fare would be within a range,” said Kapil Kaul, the CEO for the Centre for Asia Pacific Aviation in India.

Meanwhile, airline shares fell after the minister’s remarks. Jet Airways declined 3% to Rs860.4 at the close of trading in Mumbai. Kingfisher Airlines dropped 1.5% to Rs70.4, while SpiceJet fell 2.6% to Rs82.65.