Ensure airlines do not practice predatory pricing under cloak of free market economy: Parl panel tells govt

PTI, Mar 14, 2023, 11:24 AM IST

A parliamentary panel has asked the civil aviation ministry to cap the upper and lower levels of airfares, and ensure that predatory pricing mechanism is not adopted by the airlines under the cloak of free market economy.

”A perfect balance has to be maintained between the commercial interest of the private airlines and the interest of the passengers so as to enable the private airlines to grow and at the same time the interest of passengers should also be kept in mind, so that they are not fleeced in the garb of commercialisation,” the panel said.

The recommendations have been made by the Department -related Parliamentary Standing Committee on Transport, Tourism and Culture in its report on the ministry’s demand for grants for 2023-24. The report was tabled in Parliament on Monday.

Among others, there have been complaints about sudden surge in air ticket prices during peak travel seasons.

The committee also observed that presently the surge in airfares does not reflect any sort of mechanism on part of the ministry to control the fares, based on existing Aircraft Rules, 1937, as during surge in air fares the prices go beyond the acceptable or justifiable limits of ‘reasonable profit and generally prevailing tariff’.

On the one hand, the government plans to make air transport affordable for the common man and the air capacity is being increased but on the other hand, there is no commensurate expansion of the capacity to bring in aircraft. This creates lack of airline tickets considering the high demand and leads to increase in the prices, as per the report.

”The committee recommends that there should be a mechanism with the ministry such as capping of upper and lower prices to stop the practice of ‘predatory pricing’ or the sudden surge in prices… even though price buckets are being created as per international aviation norms, a close watch has to be maintained by the DGCA & the ministry and a mechanism should be devised to monitor the websites of various airlines to prevent them from misguiding passengers,” it said.

Further, the panel said that in case private airlines do not publish the correct information regarding fares, they should be penalised for it.

”The committee observes that the Ministry of Civil Aviation has a responsibility to the travelling public and the nation at large to ensure that predatory pricing mechanism are not adopted by the airlines under the cloak of free market economy. The committee recommends the ministry should formulate a pricing mechanism for air fares to ensure that passengers are not charged exorbitant prices,” it added.