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Government wants airlines to do more to lower fares

Talking tough, the government today said it was not "fully satisfied" with the steps taken by air carriers so far to lower the "astronomical" fares and wanted all airlines to do more to bring ticket costs down.

delhi Updated: Dec 13, 2010 20:25 IST

Talking tough, the government on Monday said it was not "fully satisfied" with the steps taken by air carriers so far to lower the "astronomical" fares and wanted all airlines to do more to bring ticket costs down.

After a meeting of the newly-formed Civil Aviation Economic Advisory Council (CAEAC), Civil Aviation Minister Praful Patel said, "Astronomical fares need to be controlled. We have already advised the airlines to do further more (in this regard)."

The CAEAC decided to set up a small working group, comprising representatives of the air carriers and passengers' associations, to recommend measures to "ensure transparency" in fixing of airfares, keeping the DGCA directives in mind.

Maintaining that the government "cannot be a mute spectator" to the airlines charging exorbitant fares, he said that "we are not fully satisfied" with the steps taken by the airlines so far. "Spot fares (last moment tariff) cannot be unreasonable," the minister said.

Indicating that the airlines should take the measures recommended by DGCA within a given "time-frame", Patel said in reply to questions that the DGCA could take "further action" under Rule 135 of Aircraft Rules, which deals with transparency in publishing of airfares.

The Directorate General of Civil Aviation (DGCA) and the ministry have already issued directives to the domestic carriers to maintain transparency in airfares so that passengers are aware what price they would be charged if they travel on a particular sector on a given date, he said.

Following the directives of the DGCA, the airlines had brought down tariffs by 20-25 per cent. The regulator had asked the airlines to ensure transparency by keeping passengers informed about the fares available sector-wise and date-wise in layman's language.

Patel stressed that interests of both passengers and airlines are maintained and added that passengers should not be troubled during the upcoming holiday and festive season.

This working group would meet in the next fortnight and the CAEAC would meet in January to further review the situation, the minister said.

The CAEAC was set up following a surge in airfares in November without any increase in operational costs, to advise the ministry on all financial policy issues and recommend a road-map to boost investment in the sector.

At the meeting chaired by Civil Aviation Secretary S N A Zaidi, a presentation was made on the economic health of the Indian aviation industry.

Besides Zaidi and other officials of the ministry, CEOs of several airlines and airport operators, representatives of International Air Transport Association (IATA) and industry associations like Federation of Indian Airlines, CII, FICCI and ASSOCHAM, representatives of consumer fora and travel agents also attended the meeting.

First Published: Dec 13, 2010 20:03 IST