Fix ceiling to check exploitation by airlines, panel urges ministry

NEWDELHI: A parliamentary committee has called on the government to stop airlines from jacking up prices during high demand, suggesting the ministry of civil aviation fix a fare ceiling for different routes.

The panel made the suggestion in a report tabled in Parliament on Thursday, comparing the pricing policy followed by airlines to “rampant exploitation”.

“The committee notes that around festivals and for bookings made closer to the date of travel, some airlines are charg- ing more than ten times of the advance booking fare,” said the report ‘Issues Related to Improving Consumers’ Satisfaction of Airlines’ tabled by the parliamentary panel on transport, tourism and culture.

An industry consultant said the report may not lead to drastic changes since aviation is a deregulated sector.

“While the parliamentary panel’s recommendations are not surprising, it is not binding on the government. And it is also legally untenable. In a deregulated sector it is not possible to interfere in a strategic decision such as airfare pricing,” said Kapil Kaul, South Asia CEO of aviation consultancy firm CAPA.

The house committee noted the civil aviation ministry’s explanation that flight fares are based on international practices. But, it said, economic considerations alone cannot be the criteria for pricing and a mechanism followed in developed nations may not be suitable for India.

The report also suggested that cancellation fees should be capped at 50% of the base fare.

The committee, headed by Trinamool Congress MP Derek O’Brien, also noted airlines did not pass a 50% reduction in jet fuel prices to flyers.