In a scathing attack against domestic carriers on price manipulation, GR Gopinath, entrepreneur and founder of India's first low-cost airline Air Deccan said airlines in India fix prices and the Federation of Indian Airlines or the FIA which is an airline body works as a cartel.

Airline chiefs representing low-fare airlines such as IndiGo, SpiceJet and JetKonnect heard Gopinath vent his ire. "There was a discussion as to how to put up a bottom price (on tickets). One of the Deccan CFO who attended one such meeting told me (after Kingfisher took over Air Deccan).

There is not much difference at the entry-level fares. There is only Rs 500 gap between the fares of the LCCs and the full-service airlines. FIA is a cartel to fix that price. The low-cost airlines are fooled by the full-service airlines to follow that price.

The low-cost airlines will have to first break that cartel and then only can the market can expand," Gopinath declared.

The discussion organised by Centre for Asia Pacific Aviation, became heated as CEOs of low-cost airlines joined the fray to contest Gopinath's charges.

The civil aviation regulator observed in August too that the price differential between a full-service airline like Jet and that of IndiGo were wafer thin and in fact on some select routes fares charged by low-fare airlines like IndiGo were the highest.

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