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HomeIndiaParliamentary panel suggests route-specific capping of airfares

Parliamentary panel suggests route-specific capping of airfares

The panel also reiterated its recommendation and urged the ministry to explore the feasibility of establishing a separate entity with quasi-judicial powers to exercise control over airfares being charged by the airlines.

Further, the report said the committee is of the opinion that a route-specific fare ceiling can be examined, keeping in mind the interests of both the airlines and the customer.

“It also recommends that in order to protect the commercial interests of the airlines, the feasibility of modifying the ceiling during the peak/festival season, with prior intimation, may be examined,” the report added.

According to the committee, revenue management and commercial interests such as maximising shareholders’ value determines the fixing of airfares, and passenger interests do not play a role in airfares fixation.

“Hence, it strongly recommends that Ministry may formulate a mechanism to ensure the compliance of Rule 13(1) of the Aircraft Rules, 1937 and thereby ensuring a control on surge in airfares.

“Again the term ‘reasonable profit’ is used without a clear definition or specific criteria, making it a subjective measure,” it noted.

The panel also said it is still of the opinion that the policy on variation in prices of seats for the same flight needs a relook as it is against the principle of equity.

The claim that unbundling reduces the cost of air travel for consumers who desire only the basic product needs to be scrutinised, the committee said, adding that while the practice may reduce costs for some passengers, the same may also lead to increased costs for others who end up paying for various add-ons.

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