Modi’s concern over predatory airfares, likely cess on tickets

Prime Minister Narendra Modi has expressed serious concern over the predatory pricing by the domestic airlines, an issue that will be addressed shortly by the civil aviation ministry, which is also mulling a two per cent cess on tickets in its new aviation policy.

Civil Aviation Minister Ashok Gajapathi Raju said the new civil aviation policy, which is in the advanced stage of finalisation, would provide a long-term road map for the sector’s growth.

After his address at an industry event, Minister of State for Civil Aviation Mahesh Sharma said the issue of predatory pricing was a concern of a majority of Parliamentarians and the prime minister.

“The Prime Minister has shown his concern over the predatory pricing issue and it needs to be addressed,” he said.

The issue had come up during a presentation by the Civil Aviation Ministry to the Prime Minister on draft aviation policy on Tuesday, he said.

Mr. Sharma said the airlines need to reduce fares and not hike them particularly when it comes to emergency travel like in medical emergency, adding that there could be three approaches to prevent predatory pricing ways.

“We will take the airlines into confidence and tell them that the practice (of predatory pricing) is giving a bad name to the industry,” he said.

A mechanism can also be there through the Directorate General of Civil Aviation (DGCA) or through national carrier Air India to deal with the issue, he added.

Meanwhile, sources said the Civil Aviation ministry is looking at a levy of two per cent cess on air fares which will be part of the new aviation policy.

Under the new policy, the government is looking at enhancing air connectivity to regional and remote areas such as the North East, apart from other measures to boost the domestic aviation sector.