The Telegraph
Friday , December 10 , 2010
Since 1st March, 1999
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Airfares come closer to earth

New Delhi, Dec. 9: Call it the Praful Patel effect on airfares.

Two days after the civil aviation minister set a Wednesday 5pm deadline for publication of route-wise fares, airlines proposing to charge Rs 40,000 for last-minute tickets on the Calcutta-Delhi sector announced a revised price structure.

Carriers charging between Rs 9,000 and Rs 17,000 as spot fares on the Delhi-Calcutta route since mid-November have said tickets for flights within the next 24 hours would cost between Rs 5,500 and Rs 10,400.

“Prices have dropped sharply since airlines agreed to file fares in the government’s format…. Prices have dropped by 30-40 per cent on the spot rates,” said Krishnalekha Ghosh, the director of Globe Travels.

The fare “rightsizing” is not unexpected because airlines had indicated as much on Monday after a meeting with Patel’s team and the Directorate General of Civil Aviation.

Last night, they had also agreed to hand the DGCA a copy of the tariff chart for all sectors on the 1st of every month as well as upload details on their websites.

“Any war between airlines and the government is always uneven… the business is dependent on the government for many reasons,” said Robin Pathak, a former Indian Airlines director and aviation sector analyst.

“One of the largest players is state-owned and it can break cartels easily; the government’s help is needed to roll over credit, which mostly comes from state-run banks; airports are still mostly state-owned… the list of potential pressure is endless.”

On December 2, airlines had proposed a steep rise in peak fares across four distance bands and dug in their heels till the Centre issued a veiled threat of action by invoking anti-cartel legislation on Saturday.

Patel also set up a tariff analysis unit within the DGCA to monitor route-wise fares across networks.

Kingfisher Airlines boss Vijay Mallya had said airfares could not be capped in a liberalised environment.

“The prices are more realistic now, though mind you fares can still be high… say for Christmas-eve to Goa, it could be Rs 30,000. But that was true last year too,” said Debasish Chatterjee, the director of Citi Travels.

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