Predatory pricing a 'big issue', says min, favours airfare cap

Last Updated 24 May 2015, 08:54 IST

Making a case for the capping of economy class airfares, which skyrocket during peak travel seasons and hit rock bottom in lean periods, Minister of State for Civil Aviation Mahesh Sharma has said that "predatory pricing" by the airlines is a "big issue" for passengers.

"Predatory pricing by the airlines is a big issue. A large section of the public and even parliamentarians have raised the issue that the airlines charge Rs 30,000-40,000 for a ticket when a passengers has to travel in some emergency," Sharma said. The minister's comments came days after the Competition Commission of India (CCI) said it needs to get to the bottom of the issue of arbitrary airfare hike and cartelisation by the airlines after it received a compliant from a group of lawmakers in this regard.

Civil Aviation Minister Ashok Gajapathi Raju has on several occasions in the past said that putting caps and floors for airfares would have their own implications and that pricing should be left to the carriers to decide. Sharma said he, too, was against the lowering of airfares beyond a threshold, adding, "I don't appreciate selling air tickets for Rs 500. There should be some base price, but that can't be unlimited."

He said that although, globally, airfares are unregulated, one business model cannot be replicated for all the countries and that the situation is different in each country when it comes to the pricing of air tickets.

"In principle, I agree that there should be regulations," he said, adding that this was his individual opinion and a final say on the issue rests with the government."The government's view would come after there are discussions and there is a Cabinet decision. But before that, we are exploring the possibility through discussions with stakeholders, including private airlines, on what could be done in this regard," he said.

Parliamentarians cutting across party lines and hailing from across the country, from Jammu and Kashmir to the northeast and the Andaman and Nicobar Islands, have been raising concerns about the matter from time to time, sources added.

Last week, a group of parliamentarians led by senior BJP leader and MP from Mumbai, Kirit Somaiya, lodged a fresh complaint with the CCI against the airlines.Interestingly, the ministry had last year circulated a note for internal discussion wherein it suggested steps to cap airfares at minimum and maximum levels for the economy class. 

(Published 24 May 2015, 08:54 IST)

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