Predatory pricing: Govt mulls capping airfares

Government is looking at ways to curb predatory airfares, Union Minister Mahesh Sharma said on Thursday, only two days after he ruled out considering a mechanism to deal with such practices.

There could be three approaches, including through aviation regulator DGCA, to prevent predatory pricing ways, Sharma, who is the Minister of State for Civil Aviation, said.

Interestingly, on July 21, Sharma had informed Rajya Sabha that the government was not considering formulation of a mechanism to curb predatory pricing of air tickets.

To a query about plans to curb predatory airfares, Sharma said the matter is under discussion.

Speaking on the sidelines of an event in New Delhi, he said the issue was discussed during a meeting of senior officials last month.

"Even if we talk (about the issue) in Parliament, out of the 543 Parliamentarians, I am sure at least 500 would say that there should be a capping," Sharma said.

He said efforts would be made to take airlines into confidence on the matter.

"We will take airlines into confidence and we will request them if the share from predatory pricing is very less then why don't hold it," he noted.

According to him, a mechanism can also be there through the Directorate General of Civil Aviation or through national carrier Air India.

"When the Nepal crisis happened, we fixed the (Air India ticket) price at Rs 4,500 and others were forced to keep it at that level," the Minister noted.

"Once we take a policy decision then we will do it.

“We will do it by any of these means. . . We would like to take the first approach where airlines can be taken into confidence," Sharma said.

In recent times, concerns have been expressed in various quarters, including by Parliamentarians, over steep fluctuations in airfares.

Responding to a Rajya Sabha member's query on whether the government is considering formulation of a mechanism for the capping of economy and business class airfares to curb predatory pricing of passenger tickets by airlines, Sharma had replied in the negative.

"Airfares are not regulated by the government as they are determined by the interplay of market forces," he had said in a written reply on July 21.

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