Airlines under gaze for ganging up on fares

“We have not taken a prima facie view on the issue as yet and neither have we started any investigation. Had we taken a prima facie view, we would have launched investigation ourselves”, CCI sources said, affirming that a letter has been written to the Ministry seeking facts on the matter.

The sources said: “Our suspicion arose on the basis of media reports and the statements issued by the Civil Aviation Minister (Praful Patel) on the matter”.

“The Civil Aviation Ministry is yet to respond,” they said, adding that the anti-trust watchdog has sought information on airfares since June this year to ascertain whether the airlines acted as a cartel to hike airfares.

Last year too, the competition regulator had sent notices to airlines whether they were acting together to raise or lower airfares. The airlines had then replied in the negative.

Meanwhile, the recently-set up Civil Aviation Economic Advisory Council (CAEAC) created this working group to suggest measures to protect consumer interests, including ensuring transparency in airfares.

Initial report

The group, which would submit its initial report by December 30, would examine the existing system of passenger fare structuring by all scheduled domestic airlines and the manner in which the passenger fares are disclosed to the travelling public.

It would also recommend improvements in the system of monitoring of airfares by DGCA, after studying the international best practices.

At its first meeting earlier this month, the CAEAC, set up by the Ministry, had created the working group to take a closer look at the issues concerning fixing of airfares.

The issue had assumed significance after the overall airfare levels, particularly the spot or last-minute fares, had shot up several folds even when the demand for air travel was not high.

For the past several years, airfares have become ‘dynamic’ and their levels depend on the market demand.