DGCA wants to strike a balance between fares and interests of travellers

Civil Aviation Minister Praful Patel on Friday rejected the domestic airlines' proposal for massive increases in air fare, saying there was no justification for arbitrary and exorbitant hikes.

Pitching for a more transparent and definitive way of determining the fares, Mr. Patel said the Directorate-General of Civil Aviation (DGCA) would like to know from domestic carriers how to strike a balance between the fares and the interests of travellers.

Taking on the proposal submitted to the DGCA by the airlines, Mr. Patel said the regulator was not satisfied with the answer given by most of them. The DGCA, he said, was not a price-determining authority, but it could not remain helpless. “We are not a fare-determining body or authority, but we are also not a helpless regulatory authority, therefore we would like to strike a fine balance,” he told journalists.

Mr. Patel announced the setting up of an economic advisory council in the Ministry, under the chairmanship of the Civil Aviation Secretary. The council would include all CEOs of scheduled airlines and airport operators and representatives of the DGCA, the Ministry, the industry association, consumer forums and economic research bodies.

It would look into the public disclosure of airline practices, including transparency in the disclosure of tariffs and the service to passengers, measures to boost investment in the civil aviation sector, air connectivity to remote and under-served areas, issues relating to consolidation and measures to protect the interest of consumers. It would meet once a quarter and advise the Ministry from time to time. The first meeting, scheduled for December 10, would be attended by Mr. Patel.

Mr. Patel's comments came after the airline industry, which was served with notice by the DGCA on the fares on November 19, submitted a proposal which determined prices on the basis of the distance travelled between destinations.

“Airlines cannot surprise passengers at the last hour with massive fare hikes. They have to inform the passengers about fares, category-wise and period-wise,” the Minister said.

On December 1, the domestic carriers proposed to the DGCA that the fares be categorised into four distance-based slabs — less than 750 km, 750-1,000 km, 1,000-1,400 km, and more than 1,400 km. In the peak season, the highest fares proposed for distances up to 750 km on a low-cost carrier were set at Rs.10,499, for slabs of 750 km-1,000 km Rs.14,499; Rs.16,999 for distances between 1,000 km and 1,400 km; and Rs.21,999 for distances of more than 1,400 km. For full-service carriers such as Air India, Jet Airways and Kingfisher, the increase ranged from a minimum of Rs.14,097 to the maximum of Rs.30,811 on a sector like Delhi-Chennai.

“We are working on a transparency plan for the prices so that the passengers could be made aware of them. Aware passengers are the best regulation,” Civil Aviation Secretary Nasim Zaidi said.