CCI probes airfares; govt says carriers free to fix price

As fair trade watchdog CCI probes alleged violation by airlines indulging in fare wars, the government today said the pricing decision should be best left with the carriers.

Amid airlines indulging in cut-throat rivalry in offering lowest possible airfare, the CCI is yet again probing the possible violation of competition laws, although the fair-trade regulator has failed to pin down the carriers on similar charges several times in the past.

Sources said that the CCI began its probe some time back following a reference from a Parliamentary panel in this regard, but is yet to find anything substantiative against the airlines on cartelisation charges as no one seems to be making profits through 'the unfair pricing of air tickets'.

Reacting to a question on the ongoing low-fares war among domestic airlines, Civil Aviation Minister Ashok Gajapathi Raju said that the decision to determine pricing should be left with the carriers.

He further said that air fares are not a regulated market anywhere in the world.

"As of now, airlines choose fares...our regulation is not about putting caps and floors. There are implications of floor and caps."

The Competition Commission of India (CCI), which has the mandate to keep a tab on unfair trade practices at market place, had looked into the issue of alleged anti-competitive ways in fixing of airfares.

On multiple occasions in the past, the Commission had looked into the alleged cartelisation with respect to airfares but could not find any evidence.

During those instances, the watchdog had found that air ticket prices were moving in tandem with the forces of demand and supply.

The CCI's investigation arm -- Director General (DG) -- is currently probing the matter. Meanwhile, the ongoing steep discount on airfares has come under the scanner of the Civil Aviation Ministry.

According to sources, the Ministry is taking a fresh look at the air fare movement and the matter is also being discussed with the aviation regulator Directorate General of Civil Aviation (DGCA). However, specific details about the nature of the aspects of air fare "movement" that are being looked could not be ascertained.

The latest move assumes significance at a time when almost domestic carriers have announced a series of heavy discounts in ticket prices, mainly low-cost airline SpiceJet.

January to March period is considered traditionally as a low travel period.

Besides SpiceJet, Jet Airways, Air India, Indigo, GoAir and AirAsia India, have also come out with discount offers. Last December, the Ministry in an internal note had suggested steps may be taken to fix minimum and maximum air fare". "... There is a need to fix a cap on the maximum air fare of economy class at a reasonable price of around Rs 20,000," it had said.