Sudden spurt in airfares: Govt to tighten noose

The freedom of airlines to charge public at their whim may soon be over with the Aviation Ministry planning to announce a more rationalised fare structure in a fortnight and keep a strict vigil on sudden and unexpected rise in airfare.

In the long run, the Ministry is also planning to have a regulatory mechanism to monitor fares, implying the demand and supply mechanism to determine airfares may also come to an end.

The move comes in the wake of an exorbitant rise in airfares during Diwali this year. On Diwali-eve, the economy class tickets from Mumbai to Kolkata went up between Rs 35,000 and Rs 43,000, while business class tickets were sold for as high as Rs 60,000.

Similar problems were faced in almost all metro routes prompting Aviation Minister Ajit Singh to order an inquiry into the matter. Now, the Ministry is planning to tighten the regulatory mechanism to monitor fares.

“Our focus right now is to maintain and rationalise the fares. This we are going to announce in the next fortnight,” Aviation Secretary K N Srivastava told Deccan Herald.

The Aircraft Act too provides for regulatory mechanism to monitor fares. “This is the proposal we will be considering as a long-run measure,” Srivastava said. He, however, maintained that the regulatory mechanism to monitor airfares needed to be deliberated at length before implementation.

The airfares are generally decided on the basis of “bucket system” provided by an airline to the aviation regulator DGCA. 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 this Diwali when the fares in most of the routes shot up by 15 per cent over the last Diwali spurt.

Srivastava said that the Aviation Ministry will also soon have a monitoring unit attached to it. All airlines will be duty-bound to inform this unit alongwith the DGCA on the fares they charge on a daily basis.