Regulator sends notice to airlines over exorbitant fares

TOI, 17-11-2010 20:46:28

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NEW DELHI: Acting on a TOI report highlighting how airfares have skyrocketed in the past few days, the Directorate General of Civil Aviation on Wednesday issued notices to all airline CEOs asking them to explain why travellers were being charged excessive fares.

The notice came after a probe by the regulator led to the finding that prima facie, domestic airfares from Monday (November 15) have been "substantially higher" than past weeks though there has been no hike in operating costs. The airlines have been asked to send their explanations by Friday.

"This kind of exorbitant fares can simply not be allowed. We are going to take the strictest possible action," aviation minister Praful Patel told TOI.

Explaining the action taken by the regulator, a source said, "DGCA chief Nasim Zaidi asked his officials to take passenger feedback following which the regulator’s fare analysis unit was activated to study fare movement in the past few days. Prima facie, it became evident that airlines are charging exorbitant fares since Monday without any justification for doing so."

Taking a very serious view of the findings, Zaidi is learnt to have ordered a complete study of the domestic air travel demand-supply situation in this peak season. Some big airlines are facing crew shortage because of which they are not able to operate flights as per their fleet and others like Kingfisher have a substantial part of their fleet on ground due to engine issues. Combined with the sharp capacity drop in Mumbai, thanks to the main runway closure there, the authorities fear a serious mismatch in demand-supply. Domestic air travel is growing in the range of 20-25% annually at the moment.

"We have begun a process of examining if airlines should have a fare band sensitive to demand-supply, so that fares do not exceed the highest stipulated level in crunch situations like the present one. We are also probing if this steep fare hike has been manipulated by fictitious booking so that all low fare seats are shown as sold out and only high fare ones can be bought. This kind of fleecing of passengers, as witnessed from Monday, will not be tolerated," said a top official.

TOI on Wednesday reported that for spot bookings or those done one day before the travel, one-way airfares on the Delhi-Mumbai route had soared to Rs 20,000 in economy class of full-service carriers. Even low-cost carriers were not too far behind. One-way business class fares were going as high as Rs 35,000. While almost all domestic sectors were seeing a seasonal 15%-25% rise in fares, the Delhi-Mumbai hike was as high as 300%.

Air fares rise as an aircraft’s seats keep getting sold. When a flight is just opened for ticket sale, the first few seats go for the advertised rock bottom fares. There are fears that the low fare seats are blocked by the travel industry so that only the high-fare basket seats are available to general passengers and once those seats are sold out, the fictitiously booked ones are released for sale at the higher price. The DGCA is now investigating if such foul play led to the unprecedented price hike this week.

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