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No move to regulate airfares: Govt

NEW DELHI, Dec 4, 2012, DHNS:

Amid large scale complaints about an exorbitant hike in airfares during Diwali, Civil Aviation Minister Ajit Singh on Tuesday said the government was working on ways to make fares more transparent but ruled out any move to regulate them.

“The government is trying to make airfares more transparent and reasonable,” Singh told reporters on queries whether there was any move to regulate fare in the wake of unreasonable rise on the eve of Diwali.

 He said there was no move to regulate the airfares.

 On Diwali-eve, some of the airlines raised the economy class tickets from Mumbai to Kolkata between Rs 35,000 and Rs 43,000, while prices for business class tickets went up as high as Rs 60,000.

The minister said that the government was also looking at making the bucket system more reasonable.


Airlines have a system of putting seats in different fare buckets and the fares rise from within the bucket as the aircraft gets filled.

But, when there is a heavy demand, specially during the festive season, the fares often exceed the bucket by a huge margin. This happened during Diwali when the fares in most of the routes were up 15 per cent over the last Diwali spurt.

 Singh, however defended the current spurt in fares across airlines, saying it was due to a spurt in overall cost, which included oil prices, airport charges and levy of some taxes by states.

 The International Air Transport Association has also from time-to-time spoken against regulating the competitive aviation market. But, high fuel costs are the main problem, which pushes up the cost making airlines to resort to increasing fares.
 

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