Airfare hikes within permissible limits: DGCA
Despite numerous complaints on fluctuation in airfares, private airlines in the country have been found to be within permissible limits of hikes in high airfare bucket for the month of April, data released by aviation regulator DGCA showed.
According to DGCA regulations, a 2% hike in airfares of tickets falling in the high fare bucket is permitted. Pointing to select sector-wise fare data, DGCA chief M Sathiyavathy said, "The average rise has been less than 1.5 per cent or a maximum of 2 per cent in high fare bucket for the month of April. We will be monitoring it every month henceforth."
With 14 long weekends this year, in addition to emergency situations like unprecedented floods in Chennai and Srinagar and the recent Jat agitation, complaints of arbitrary fare hikes have been pouring in, especially from Parliamentarians.
Last month, the DGCA identified routes like Mumbai-Srinagar, Delhi-Mumbai, Mumbai-Hyderabad, Kolkata-Guwahati, Kolkata-Port Blair, Delhi-Srinagar, Delhi-Leh, Delhi-Dehradun, Delhi-Patna, Bangalore-Delhi and Delhi-Hyderabad for the purpose of monitoring the number of tickets sold in the highest fare bucket and share of revenue earned from these routes.
On the issue of capping airfares, Sathiyavathy indicated that a meeting may be convened soon, adding that, “If capping of airfares is required, we will discuss the same with airlines.” The government has been of the view that flights of one hour duration should be capped at Rs 2500.
The DGCA chief further informed that airlines have come forward and offered extra flights during times of crisis, such as the Chennai floods. "Whether it was floods at Chennai and Srinagar, Jat agitation or earthquake in Nepal, the DGCA interacted with the airlines," she said, adding that airlines readily came forward and offered extra flights, some of them even free of cost.
On the capping of fares, Mahesh Iyer, Chief Operating Officer, Thomas Cook (India) Ltd, said, “Initiatives like the proposed fare-cap at Rs 2500 per hour of flight will unlock India’s travel and tourism potential growth to its optimal, making domestic travel affordable to large yet-untapped, under-leveraged markets and segments.”
Some aviation experts, however, criticised the government for monitoring airfares and said it is a function of demand and supply. “DGCA is involving itself in the pricing regime. It is a safety compliance and standard organisation, not an economic regulatory bureau,” said Mark D Martin, founder and chief executive of Martin Consulting, an aviation consulting firm.
According to DGCA regulations, a 2% hike in airfares of tickets falling in the high fare bucket is permitted. Pointing to select sector-wise fare data, DGCA chief M Sathiyavathy said, "The average rise has been less than 1.5 per cent or a maximum of 2 per cent in high fare bucket for the month of April. We will be monitoring it every month henceforth."
| Sector and Airlines | % of revenue from highest fare bucket | % of highest fare bucket seats sold |
| Delhi-Dehradun (Jet Airways) | 3.52 | 0.86 |
| Bangalore-Mumbai (Jet Airways) | 1.19 | 0.5 |
| Mumbai-Delhi (Jet Airways) | 0.69 | 0.3 |
| Delhi-Patna (Go Air) | 3.41 | 1.29 |
| Mumbai-Delhi (Go Air) | 0.51 | 0.14 |
| Bangalore-Mumbai (Indigo) | 0.38 | 0.07 |
| Mumbai Delhi (Vistara) | 0.25 | 0.09 |
With 14 long weekends this year, in addition to emergency situations like unprecedented floods in Chennai and Srinagar and the recent Jat agitation, complaints of arbitrary fare hikes have been pouring in, especially from Parliamentarians.
Last month, the DGCA identified routes like Mumbai-Srinagar, Delhi-Mumbai, Mumbai-Hyderabad, Kolkata-Guwahati, Kolkata-Port Blair, Delhi-Srinagar, Delhi-Leh, Delhi-Dehradun, Delhi-Patna, Bangalore-Delhi and Delhi-Hyderabad for the purpose of monitoring the number of tickets sold in the highest fare bucket and share of revenue earned from these routes.
On the issue of capping airfares, Sathiyavathy indicated that a meeting may be convened soon, adding that, “If capping of airfares is required, we will discuss the same with airlines.” The government has been of the view that flights of one hour duration should be capped at Rs 2500.
The DGCA chief further informed that airlines have come forward and offered extra flights during times of crisis, such as the Chennai floods. "Whether it was floods at Chennai and Srinagar, Jat agitation or earthquake in Nepal, the DGCA interacted with the airlines," she said, adding that airlines readily came forward and offered extra flights, some of them even free of cost.
On the capping of fares, Mahesh Iyer, Chief Operating Officer, Thomas Cook (India) Ltd, said, “Initiatives like the proposed fare-cap at Rs 2500 per hour of flight will unlock India’s travel and tourism potential growth to its optimal, making domestic travel affordable to large yet-untapped, under-leveraged markets and segments.”
Some aviation experts, however, criticised the government for monitoring airfares and said it is a function of demand and supply. “DGCA is involving itself in the pricing regime. It is a safety compliance and standard organisation, not an economic regulatory bureau,” said Mark D Martin, founder and chief executive of Martin Consulting, an aviation consulting firm.
