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Tuesday 23-Nov-2010

DGCA clampdown on Airlines over sudden Airfare Hikes

All the scheduled domestic airlines will have to furnish a copy of the route-wise tariffs across its network in various fare categories, in the manner it is offered in the market to the DGCA on the first day of every calendar month, any significant changes to be notified to DGCA

By  Traveltechie Bureau | Mumbai

Earlier this month, the fare from Mumbai to New Delhi was hiked to Rs 35,000. Pulling up airlines for unfair pricing, it was issued a directive to maintain transparency in tariffs. 

All the scheduled domestic airlines will have to furnish a copy of the route-wise tariffs across its network in various fare categories, in the manner it is offered in the market to the DGCA on the first day of every calendar month. Any significant and noticeable change in the established tariff so filed with DGCA shall be reported to DGCA within 24 hours of effecting such changes," the DGCA said in a statement. 

The DGCA has also asked airlines to maintain a record related to tariffs in its office and publish airfares on their websites or in newspapers. 
This will help people find out if the airfares are more than the highest level for travelling during a particular period, DGCA said. 
From December to January, the airfares are likely to rise by 20 per cent. 

Last year, the DGCA, suspecting cartelisation among airlines after some of them withdrew their low-end air fares, had directed all scheduled domestic carriers to give details and justification for their decision to “simultaneously” raise prices. In February 2009 also, the DGCA had shot off letters to all carriers asking for information regarding the hike in fares and to ensure transparency through advertising. 

“Insufficient and inadequate information available in the public domain on airfares”, and reports of scheduled airlines charging excessive high tariff for flights across their network during the high demand period were “causing lot of inconvenience to the travelling public and drawing adverse comments on airfares”, the latest DGCA circular said. It asked the airlines to maintain all records pertaining to established tariff in its office for inspection. 

The move comes at a time airlines in the Asia-Pacific region are expected to corner the maximum profits. The International Air Transport Association (IATA) has projected a global profit of $8.9 billion in 2010. Asia-Pacific carriers are expected to post a $2 billion profit this calendar year compared with $3.5 billion in North America, $1 billion in Latin America, $400 million in West Asia and $100 million in Africa, the IATA said. 

However, the growth witnessed this year was not likely to continue in 2011 because of several factors. While consumer spending was not expected to pick up, joblessness was high and consumer confidence was falling in Europe and North America. 
According to its preliminary forecast, the IATA expects profit to drop to $5.3 billion in 2011.