A parliamentary panel has asked the civil aviation ministry to cap the upper and lower levels of airfares and ensure that predatory pricing mechanism is not adopted by the airlines under the cloak of a free market economy.
“A perfect balance has to be maintained between the commercial interest of the private airlines and the interest of the passengers so as to enable the airlines to grow and at the same time the interest of passengers should also be kept in mind, so that they are not fleeced in the garb of commercialisation,” the panel said.
The recommendations have been made by the department-related parliamentary standing committee on transport, tourism and culture in its report on the ministry’s demand for grants for 2023-24. The report was tabled in Parliament.
The panel has received complaints about a sudden surge in ticket prices during peak seasons.
The prices go beyond the acceptable or justifiable limits of “reasonable profit and generally prevailing tariff”, the panel said.
It said the government has no mechanism in place under Aircraft Rules 1937 to check prices Ankit Hakhu, director of Crisil Ratings, said: “Air traffic volume is expected to grow over 70 per cent and touch 325 million for full fiscal 2023. While this may still be a tad lower than the pre-pandemic levels, we expect the rising trajectory to continue.”
The panel said the government is taking many steps to make air transport affordable to the common man, but there is no commensurate expansion of capacity. This creates lack of airline tickets considering the high demand and leads to an increase in the price.
“The committee recommends that there should be a mechanism with the ministry such as capping of upper and lower prices to stop the practice of ‘predatory pricing’ or the sudden surge in prices... even though price buckets are being created as per international aviation norms, a close watch has to be maintained by the DGCA and the ministry and a mechanism should be devised to monitor the websites of various airlines to prevent them from misguiding passengers,” it said.
The panel said airlines should be penalised if they do not publish the correct information on fares.
“The committee observes that the Ministry of Civil Aviation has a responsibility to ensure that predatory pricing mechanism are not adopted by the airlines under the cloak of free market economy. The committee recommends the ministry should formulate a pricing mechanism for air fares to ensure that passengers are not charged exorbitant prices,” it added.