Charge low fares to prevent seats going empty: Govt to carriers
Feb 05 2013 , New Delhi
Observing that highly exorbitant rates were being charged closer to the travel dates, Civil Aviation Ministry officials, however, made it clear that the government had no intention to decide airfares which have to be determined by the market.
They pointed out that the average passenger load factor for all Indian airlines hovered around 70-75 per cent, implying that the remaining seats on a flight go empty.
The officials, at a meeting of the Civil Aviation Economic Advisory Committee here yesterday, suggested that the airlines could charge last minute spot-fares at low fares to fill up their seats.
Maintaining that the government would not determine airfares, they said the Ministry and aviation regulator Directorate General of Civil Aviation (DGCA) would continue to closely monitor the movement of airfares, particularly to check both predatory and exorbitant pricing.
The meeting came in the backdrop of a Supreme Court directive last month to DGCA to examine the tariff structure of Indian airlines in view of the wide range of the base prices of air tickets.
The apex court had expressed concern over the massive differential between the lowest and highest air fares on the price bands.
DGCA sources said efforts would be made to compress these wide price bands, ranging from 12 to as high as 22 set by different airlines on each sector, and make air fares more transparent so that the travelling public was clear about the cost of travel.
While there was a need to make the price bands more transparent, there should also be some rationale behind the huge differences between the highest and the lowest air fares in these price bands, they said.
Justifying the high price bands, airline industry sources said that they have to take into account, apart from the actual costs of air travel, the variable costs on inputs like jet fuel, whose prices continue to rise, and staff costs.
While most of the major carriers have 13-14 fare levels on most sectors, no-frill carrier GoAir has as many as 22 one -way basic fares ranging from Rs 3,770 to Rs 24,200 for one- way travel between Delhi and Mumbai in December last year.
Its no-frill competitor IndiGo's tickets ranged from the lowest of Rs 3,770 to the highest level of Rs 16,449, while SpiceJet's was Rs 3,770 and Rs 15,489.
On the same sector in the same month, Air India charged the lowest fare of Rs 3,920 and the highest of Rs 17,308, while the fares of Jet Airways ranged from Rs 3,970 to Rs 23,950. Similarly, Jet Konnect fares on Delhi-Mumbai sector were between Rs 3,970 and Rs 24,100.
Over and above these basic fares, a passenger also has to pay a passenger service fee, airport charges and a fuel surcharge.