Industry

Airlines sold fewer seats in highest fare bracket in April, DGCA data show

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Low-cost carrier IndiGo, SpiceJet and GoAir didn’t sell a single seat in the highest fare bucket on many routes.

Domestic airlines sold far fewer seats in the highest fare bracket in April, contrary to the concerns raised by some parliamentarians, according to the first monthly analysis of the Directorate-General of Civil Aviation (DGCA) aimed at checking price surges.

The data showed that Jet Airways sold an average 0.41 per cent of tickets in the highest fare bracket across the busiest domestic routes. Such fares constituted 1.16 per cent of Jet Airways’ total revenue on an average.

Low-cost carrier IndiGo, SpiceJet and GoAir didn’t sell a single seat in the highest fare bucket on many routes.

Complaints from MPs

Vistara sold fewer high fare tickets and AirAsia India earned between one and two per cent from the highest fares. Airlines offer different fare brackets for each flight, known as fare bucket. Following complaints from Members of Parliament, the DGCA recently started collecting monthly data from airlines on the number of tickets they sold in the highest fare bucket, and the contribution of such tickets to their revenue from 20 domestic routes. But the DGCA’s traffic report for April didn’t mention the ticket pricing details of Air India.

Experts criticised the move to track airfares, arguing that India hasn’t yet reached a stage where exorbitant pricing is a trend as that is mostly prevalent in regions which are dependent on air travel.

“It’s getting more and more obvious that this government, including the DGCA, have lost the plot when it comes to supporting growth with aviation,” said Mark D Martin, founder and chief executive of Martin Consulting, an aviation consulting firm. “What’s more surprising is that instead of focusing on more pressing issues pertaining to safety and compliance and aviation standards, the DGCA is procrastinating with absolutely irrelevant issues that’s best left to the consumer to decide,” he said.

Some lawmakers had sought action against airlines, alleging that the airfares remained high despite a decline in jet fuel prices which account for over 40 per cent of airlines’ operational costs. The Centre has been regularly meeting the airline companies on concerns over high air fares.

To meet stakeholders

It will soon hold consultations with stakeholders, including airlines, to cap airfares during natural calamities or unpredictable situations. Its own observations and analysis in the past have shown that airfares were not on the higher side.

Defending the airlines, Civil Aviation Minister Ashok Gajapathi Raju recently told the Lok Sabha that airlines passed on the benefits of declining aviation turbine fuel prices to passengers, as per a study conducted by the government during January-March this year. “We did an analysis of 23 routes and we realised that in the airfare from January-March, 2015 to January-March, 2016, there was a reduction, the average being 18.10 per cent, which means the reduction in ATF prices is being passed on to the consumers,” he said.

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Printable version | Dec 6, 2019 12:34:18 AM | https://www.thehindu.com/business/Industry/airlines-sold-fewer-seats-in-highest-fare-bracket-in-april-dgca-data-show/article8633755.ece

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