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Airlines propose massive hike in fares, DGCA may say no

india Updated: Dec 02, 2010 21:27 IST
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Domestic airlines have proposed a massive hike in air fares ignoring Government's calls not to resort to exorbitant fares after they were hauled up for abrupt rise in ticket costs even during non-peak season.

The airlines however may not have their way with the new fare structure they have proposed since the Directorate General of Civil Aviation (DGCA) is unlikely to give its nod. The civil aviation regulator received the proposals on Wednesday.

DGCA sources said today the civil aviation regulator is likely to shoot down the proposed price bands and may ask the airlines to rework them keeping the interests of passengers in mind.

"The responses (of airlines) are under examination," civil aviation secretary S N A Zaidi said. The fare bands proposed by airlines are for the first time based on distance-based slabs.

As per the proposals, an air passenger travelling economy class may have to shell out Rs 10,500 for a Delhi-Chandigarh or Chennai-Coimbatore flight and anything upto Rs 40,000 on the Delhi-Bangalore or Delhi-Kolkata route.

The domestic airlines came out with the proposal after they were asked by the DGCA to submit the planned price bands on various sectors after some of them resorted to steep hike in airfares even during the non-peak season.

Civil aviation minister Praful Patel reiterated that the airlines would not be allowed to charge exorbitantly.

"DGCA will not allow any predatory or exorbitant pricing...If there is something lacking we will make necessary correction. We will not allow airlines to charge exorbitantly. We will not let them take advantage of a situation," he said.

DGCA sources made it clear that there should not be a situation where the airlines fleece passengers through a huge fare increase.

The average price would be lower if tickets are bought in advance. The fares would reach their peak if purchased on the day of travel or just a day before, the sources said.

The regulator, which has established a Tariff Analysis Unit to keep a tab on the prevailing fare levels, would take a decision on the matter very soon, the sources said. The Unit would monitor route-wise tariff across their networks on a regular basis from now on.

In their responses, the airlines proposed one-way fares ranging between Rs 10,500 and Rs 40,000 for distances of less than 750 km and more than 1,400 km.

Interestingly, both these fares have been suggested by no-frill carriers.

The airfares have been quoted for four distance slabs of less than 750km, 750-1,000km, 1,000-1,400km and beyond 1,400km.

IndiGo, SpiceJet, Jet Airways, JetLite, GoAir and Air India (Domestic) have given their proposals on this basis. Kingfisher Airline has been asked by DGCA to rework its proposal as it has submitted fares on the basis of two slabs.

The fares proposed by these airlines on the 750-1,000km slab ranged between Rs 14,550 and Rs 19,500, while it was between Rs 17,000 and Rs 25,000 for the next slab.

The high distance slab had proposed fares ranging between Rs 22,000 and Rs 40,000.

Sending a strong signal to domestic airlines over sudden spurt in airfares, the Civil Aviation Ministry had warned them of action if they continued predatory pricing.

The airfares have been almost 30-40% high on several major domestic routes even during the non-peak season.

The DGCA has also asked the airlines to publish air fares on their websites or in newspapers on a regular basis.

Last year when some airlines withdrew their low-end air fares almost simultaneously, moves towards cartelisation were suspected. DGCA had then asked all scheduled carriers to give details and justify their decision to raise the prices.