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DGCA seeks clarity on fare hike

After yo-yoing with airfares in the past month and suddenly increasing the base fares despite aviation turbine fuel prices hovering at 2005 levels, the Director General of Civil Aviation has sought an explanation from airlines about the recent fare hike.

india Updated: Feb 12, 2009 21:14 IST
HT Correspondent

After yo-yoing with airfares in the past month and suddenly increasing the base fares despite aviation turbine fuel prices hovering at 2005 levels, the Director General of Civil Aviation (DGCA) has sought an explanation from airlines about the recent fare hike.

Intervening into the fare structures of airlines (which is not administered), the DGCA in a letter to all airlines has sought information on the “recent airfare increase by the airlines” and “the transparency in airfare advertising.”

The airlines have to reply to the query by Saturday.

Airlines have hiked basic air fares between Rs 1,500 and Rs 5,000 for a one-way economy class ticket.

“The DGCA was not aware of the reasons for this simultaneous hike, specifically at a the time when the ATF prices, effective 1st February, 2009, are at the level that they were in 2005. As such, the DGCA felt that there appeared to be no rationale for increasing the airfares,” the letter said.

In a separate communication to all domestic airlines, the DGCA has observed “airfares displayed on the respective websites of domestic airlines comprise several components like basic fare, fuel surcharge, congestion charge and passenger service fee all loosely labelled as taxes. This aspect gives an impression to the travelling public that high airfares are due to the government taxes.”

Asking for transparency in the advertising, the DGCA has directed that airlines may display the fare as one composite fare, correctly indicating the charges accruing to the airlines.

However, major carriers said “fares are fixed in accordance with the demand and the competitive environment.”

“The recent changes in fares on domestic routes were undertaken by Air India solely as a response to the changed market situation and did not occur simultaneously with the increase in fares by other carriers,” Air India spokesperson said.