Separate cell to monitor fares; cap on the highest and lowest prices for domestic airlines coming

The failure of the Director General of Civil Aviation to keep a tab on fares has forced the Civil Aviation Ministry to not only create a separate cell for monitoring ticket rates but also put a cap on the highest and lowest prices for domestic airlines.

With air fares soaring in the last few months and the DGCA unable to find a remedy, its role has come under scrutiny after the Supreme Court rapped the regulatory body for not acting on its order restricting airlines from imposing a transaction fee on passengers.

According to sources in the Ministry, Civil Aviation Minister Ajit Singh has asked officials to work on a proposal to ensure that passengers are not forced to shell out exorbitant amounts during the peak season or peak hours as also those hose buying tickets at the last moment.

At the same time, officials say, the idea is not to fix fares but to put a cap on the lowest and highest fares in consultation with the stakeholders so that the interests of both passengers and the airlines are protected. Under the new formula, fares would not be allowed to go beyond a fixed multiple of the minimum air fare during a given period. However, the aviation industry sees this as infringing the airlines’ capacity to take commercial decisions. Currently, the price bands of each airline range from 12 to as high as 22 in various sectors.

The officials stress the need for more transparency in fixing the price bands, saying there has to be some logic behind the massive difference between the highest and lowest fares.

The DGCA is likely to convene a meeting soon of the stakeholders — domestic airlines — to look into their tariff structure in view of the wide range of the base prices.

Expressing concern over the massive differential between the lowest and highest fares, the Supreme Court directed the DGCA to examine the tariff structure of the airlines, pointing out that there were several price bands for fixing the base price.

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