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Sudden hike in airfares: Govt warns airlines

Last updated on: November 25, 2010 16:42 IST

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Sending a strong signal to domestic airlines over abrupt hike in airfares by some of them during periods of high demand, the Union civil aviation ministry on Thursday warned them of action if they continued with such 'predatory pricing'.

"Fares on lower and higher price band on every sector will have to be notified. It has to be in the public domain on each airline's website on what would be the fares on higher price band," Civil Aviation Minister Praful Patel said on the sidelines of Ficci's aviation conference.

He further said that the government and the Director General of Civil Aviation had taken serious note of 'exorbitant prices' charged by the airlines on most of the routes and issued notices to them.

Commenting on reports that spot bookings for certain routes including Delhi-Mumbai have soared to as high as 300 per cent post Diwali, the minister said, "This kind of predatory pricing can not be justified, it is unfair to the passengers."

The DGCA, which issued a directive to all airlines earlier this week, has sent notices to them to explain why such high prices were being charged.

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"We will take action against airlines that violate the price band. In fact, DGCA has sent notices to all the airlines. This kind of predatory pricing cannot be justified and it cannot be allowed to continue," Civil Aviation Minister Praful Patel said in New Delhi.

Replying to questions, he said that in the past few weeks, airlines "have been charging very exorbitant prices on most routes. This is a phenomenon which has been taken serious note of by the ministry as well as the DGCA."

Patel said the aviation regulator had special powers which "can certainly be invoked if the airlines do not act responsibly in the days to come."

He said officials of the ministry and the DGCA would meet soon to review the issue and continue monitoring the movement of airfares.

Patel's statement came days after the DGCA directed the scheduled domestic airlines to furnish route-wise tariff on their entire network in the beginning of each month, in a bid to prevent them from hiking prices abruptly whenever there was heightened demand.

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Image: Praful Patel, Civil Aviation Minister.
Photographs: Reuters
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In a circular, DGCA asked the airlines to 'furnish a copy of the route-wise tariff across its network in various fare categories, in the manner it is offered in the market, to DGCA on the first day of every calendar month'.

Any 'significant and noticeable change' in the established tariff already filed, should be reported to DGCA 'within 24 hours of effecting such changes', it said.

The regulator asked the airlines to publish air fares on their websites or in daily newspapers on a regular basis. It also asked them to maintain all records pertaining to the established tariff in its office for inspection.

'Insufficient and inadequate information available in the public domain on airfares' and reports of scheduled airlines charging excessive high tariff for flights across their network during the high demand period was 'causing lot of inconvenience to the travelling public and drawing adverse comments on airfares,' the DGCA circular said.

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Photographs: Reuters
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Last year, when some airlines withdrew their low-end air fares almost simultaneously, moves towards cartelisation were suspected. DGCA had then asked all scheduled carriers to give details and justify their decision to raise the prices.

According to news reports, the DGCA is also investigating whether sudden spurt in prices is because of manipulation by the travel industry.

Allegations are that the low fare seats are reserved in advance by the travel industry, so that only the high-fare basket seats are available to general passengers and once these seats are sold out, the fictitiously booked ones are released for sale at the higher price.

The government has held two meetings with concerned airlines and airport authority officials to improve on-time performance at Delhi and Mumbai airports, Lok Sabha was informed on Thursday.

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Replying to a question, Praful Patel said during the morning flights out of Delhi, all the airlines would close their gates and take a push-back at least 15 minutes before scheduled time of departure.

For flights coming into Delhi and are turning around for departure, ATC will try its best to provide a slot close to their scheduled time of departure, he said in a written reply.

"Under no circumstances, push-back would be taken without closure of gates. Once the permission for push-back has been granted by ATC, the permission would only be valid for next five minutes. If the aircraft has not been physically pushed back within this period, the permission would automatically get cancelled and the aircraft would fall back in the queue and would be considered for push-back in the next available slot as per the queue," the minister said.

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He added that as per a DGCA circular, airlines not adhering to the approved time slots shall be liable to lose the slot in the next schedule.

To another question, Patel said there was no plan to revive the defunct Vayudoot Airlines, but, in a meeting held in October the board of directors of Vayudoot Ltd recommended that NACIL may initiate a study to look into the feasibility of starting operations and maintenance of smaller capacity aircraft to tier-4 cities.

Answering another question, the minister said as many as 18 firms were granted security and ground security clearance during the last two years.

Patel also said that as per the revised Civil Aviation Requirements (CAR), there are no guidelines for appointing expatriate pilots. The expatriate pilots are recruited by airline operators on their own, depending upon their requirement.

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