Govt asks for drop in air fares, airlines beg to differ

NEW DELHI: Civil aviation minister Praful Patel hinted at a possible reduction in fares by state-owned carriers Air India and Indian even as private carriers led by Jet Airways and Kingfisher Airlines said that unless duty on jet fuel were reduced, they would be in no position to cut their fares.

Prices of aviation turbine fuel (ATF) have fallen by an estimated 40 per cent between June and November.

The minister said “Air India doesn’t have to think like these two (Kingfisher and Jet). It is a responsible government carrier and can decided for itself… if oil prices come down, so should fares”.

Exhorting all airlines to cut fares, Patel said, “While it is true that you (airlines) are facing difficult times, the government is also trying to help you tide over the situation. Now, with fuel prices falling, you must match it with lower fares or public sympathy will not be with you.”

Jet Airways and Kingfisher Airlines, which have already forged an “operational” alliance to cut costs, account for about 60 per cent market share and there have been allegations that this could lead to cartelisation. Patel said government would look into the matter if such an alliance leads to cartelisation or monopolisation.

While Jet Airways’ Naresh Goyal said the government should set up a regulator, Patel
rejected the suggestion saying “you are the byproduct of deregulation and cannot now ask for a regulator.”