Fares fall after government’s crackdown warning, airlines sulk | india | Hindustan Times
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Fares fall after government’s crackdown warning, airlines sulk

india Updated: Dec 05, 2010 02:26 IST
Tushar Srivastava
Tushar Srivastava
Hindustan Times
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A day after they were warned of a crackdown over skyrocketing fares, domestic airlines seemed to have fallen in line. Airfares on most routes were back in the Rs 6,000-9,000 bracket on Saturday.

"Tickets on the Delhi-Mumbai sector, for Saturday evening and Sunday morning, are available for Rs 5,900 to R6,525. On the Delhi-Chennai route it’s between Rs 6,000-7,500, Delhi-Hyderabad is available between Rs 6,300 and Rs 9,100 and Delhi-Kolkata is selling for around Rs 7,100,” said Rajji Rai, president, Travel Agents Association of India.

The fares, Rai said, had come down drastically in the last 24-hours. “For the last two weeks, the lowest available ticket on the Delhi-Mumbai sector was priced over Rs 17,000,” he said.

“The drop in fares just shows that airlines can afford to sell tickets at lower rates and still make money. To take
advantage of a difficult situation and fleece and exploit the customer is the worst crime a manufacturer or a service provider can commit,” said R Desikan of the Consumer Association of India.

But private carriers are not very happy with the government’s move. “Why should the government regulate anything in an era of deregulation and competition,” Kinghfisher Airlines chairman Vijay Mallya was quoted as saying in Bangalore. “An airlines seat is a perishable commodity. It is dictated by demand and supply. Dynamic pricing is practised all over the world by every airline without exception. I do not understand why we are making a song and dance of it in India,” Mallya said.

"I would request the government on bringing down the highly excessive sales tax on ATF (jet fuel), which we are willing to pass on to the consumers immediately,” he added.

Last-minute fares — at the crux of the issue, civil aviation minister Praful Patel had acknowledged earlier — had shot through the roof in the past few months. Even low-cost carriers (LCC) quoted fares between Rs 20,000-40,000 on
certain routes in a reply sent the Directorate General of Civil Aviation (DGCA).

While domestic carriers charged up to Rs 40,000 one-way on some routes, international return tickets are far cheaper.
A Delhi-Sharjah return ticket on Air Arabia is available between Rs 12,000 and 15,000; flydubai charges around Rs 13,000 for a Lucknow-Dubai return ticket and a one-way Delhi-Kuala Lumpur ticket on AirAsia costs around Rs 10,500.

Top executives of the three the low cost carriers — Indigo, SpiceJet and GoAir, met with DGCA chief EK Bharat Bhushan on Saturday. Representatives of full service carriers would meet him on Monday.

“Soon you will see tangible results. We have told them about the problems and the need to be reasonable. It has to be ensured that passengers have the right information. We have asked them to provide us information on certain specific parameters,” Bhushan said.

"We are not getting into the business of regulation but there has to be fairness in the fares, which they charge,” he added. Sources said airlines are likely to put the latest fares on their websites in the next few days.

"Sure, within a week you will find corrective action...the regulator is not helpless ... I am sure they can and they will (act) when the situation wants. It is not that we are not seeing it. The situation is being monitored,” Patel said in Mumbai.

Spokespersons of Kingfisher and Jet Airways did not respond to calls from HT .