Parliamentary panel suggests route-specific capping of airfares

The Parliamentary panel report pointed out various instances where airlines hiked prices of flight tickets exorbitantly during festivals or holidays. It suggested a mechanism whereby DGCA is given the authority to regulate air tariffs. A Parliamentary panel has proposed a route-specific capping of airfares amid concerns about rising flight ticket fares. After responses from the civil aviation ministry on airfares, the panel is also mulling setting up a separate entity to exercise control over air ticket prices. Self regulation of flight ticket prices, the committee pointed out, has not been effective so far. The Parliamentary Standing Committee on Transport, Tourism and Culture tabled this report on Thursday, spelling out the measures taken by the government on its recommendations and observations on the issue of fixing airfares. The report pointed out various instances where airlines hiked prices of flight tickets exorbitantly during festivals or holidays. It suggested a mechanism whereby DGCA is given the authority to regulate air tariffs. Airfares are not regulated by the government currently. The panel also suggested forming a separate entity with quasi-judicial powers to control airfares. The Parliamentary panel also specified that the interests of both airlines and customer must be kept in mind, and suggested a route-specific fare ceiling. The ceiling, it said, could be modified during peak/festival season with prior information. The committee pointed out that revenue management and commercial interests play a role in fixing fares and not passenger interests. "Hence, it strongly recommends that the 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,” it said. The policy of variation of prices of seats must be looked at as it is against the principle of equity, the panel stated. It also suggested the claim that unbundling reduces the cost for customers who only desire the basic product needs to be scrutinized. The practice, it said, may reduce costs for some but might also lead to increased costs for others.