Let the market, not regulators, decide airfares: Mallya | india | Hindustan Times
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Let the market, not regulators, decide airfares: Mallya

india Updated: Dec 06, 2010 15:21 IST

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Protesting against the government efforts to reduce high prices charged by airlines on tickets booked at short-term notice, Kingfisher Airlines promoter Vijay Mallya on Monday said airfares should not be capped by the regulatory authorities, whether it is in upper or lower band.

"There is no case of capping airfare in a liberalised environment, be it at upper or lower band. It is a function of demand and supply," Mallya told reporters on the sidelines of a Ficci conference.

"It is not exploitation by the airlines... Airlines are fighting for market share, so demand and supply has to be respected", he said, adding, "Media is sensationalising the fare issue."

Official sources tell that the airfares charged by the domestic airline companies have come down by 20-25 per cent after the 'pressure' mounted by the Civil Aviation Ministry and Directorate General of Civil Aviation (DGCA) against exorbitant airfares.

In the last few weeks, Civil Aviation Minister Praful Patel and the aviation regulator DGCA have warned that action would be taken if the errant airlines did not roll back the abrupt hike in air fares.

On Saturday, Director General of Civil Aviation E K Bharat Bhushan had a meeting with the representatives of the low-cost carriers SpiceJet, IndiGo and Go Air on the issue. This week, he is likely to meet representatives of full service airlines -- Air India, Jet Airways and Kingfisher Airlines -- for discussions.

At present, the air fare range on Delhi-Mumbai sector is between Rs 5,000- Rs 20,000 on economy class ticket, while on Delhi- Chennai and Delhi-Kolkata sector, it is between Rs 5,000-Rs 15,000.

Post Diwali, the air fares, especially the last-minute or spot tickets, had skyrocketed. Two weeks ago, the lowest fare for the last-minute tickets booked at Delhi-Mumbai route was about Rs 17,000, even though holiday travel season had not begun.

This is in contrast to the lowest available fares of about Rs 3,000 for Delhi-Mumbai and Rs 4,000 for the Delhi-Chennai and Delhi-Kolkata route during the same period last year.

The proposal of airliners to fix ticket fares based on four distance slabs of less than 750 km, 750-1,000 km, 1,000-1,400 km and beyond 1,400 km, was rejected by the Civil Aviation Ministry last week.

According to this proposal, a passenger buying an economy class ticket closer to the travel date would 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.