the Parliamentary Standing Committee on Transport, Tourism, and Culture presented its report on the government’s actions regarding its recommendations on the matter of airfare regulation

 

Amidst mounting apprehensions regarding escalating airfares, a Parliamentary committee has advocated for the imposition of route-specific limitations on airfare hikes and the establishment of a distinct regulatory body to oversee air ticket pricing. Following an assessment of the Civil Aviation Ministry’s stance on airfares, the committee determined that the airlines’ self-regulatory measures have been ineffectual.

On Thursday, the Parliamentary Standing Committee on Transport, Tourism, and Culture issued its findings on the government’s response to its recommendations and observations concerning airfare regulation.

The committee highlighted instances of substantial increases in airfares, particularly during festive seasons or holidays, in its report. It conveyed the opinion that airline self-regulation has proven futile and proposed empowering the Directorate General of Civil Aviation (DGCA) to regulate air tariffs as a viable resolution. Presently, the government neither dictates nor supervises airfares.

Reiterating its proposal, the committee urged the ministry to explore the feasibility of establishing an autonomous body endowed with quasi-judicial powers to oversee the airfares determined by airlines.

Moreover, the report posited that exploring specific fare caps for different routes could be advantageous, taking into account the interests of both airlines and passengers.

“It also suggests that to safeguard the commercial interests of airlines, the possibility of adjusting the caps during peak or festive seasons, with prior notification, should be examined,” the report stipulates.

The committee underscored that revenue management and commercial considerations, such as maximizing shareholder value, predominantly influence airfare setting, with passenger interests largely overlooked.

“Therefore, it strongly advises that the Ministry devise a mechanism to ensure compliance with Rule 13(1) of the Aircraft Rules, 1937, thereby curbing the escalation of airfares. Once again, the term ‘reasonable profit’ is employed without a definitive definition or specific criteria, rendering it a subjective benchmark,” it highlighted.

Furthermore, the committee reiterated its stance that the policy regarding price disparities for seats on the same flight necessitates reevaluation, as it contradicts the principle of equity.

The committee stressed the imperative to scrutinize the assertion that unbundling reduces air travel expenses for passengers seeking essential services exclusively. It noted that while this practice may reduce costs for certain passengers, it could simultaneously lead to heightened expenses for others opting for supplementary services.

 

In response to escalating concerns about soaring airfares, a Parliamentary panel has recommended implementing route-specific caps on airfares and establishing a distinct entity to regulate air ticket prices. Reviewing the Civil Aviation Ministry’s feedback on airfares, the committee concluded that the airlines’ self-regulation of ticket prices has proven ineffective.

On Thursday, the Parliamentary Standing Committee on Transport, Tourism, and Culture presented its report on the government’s actions regarding its recommendations and observations on the matter of airfare regulation.

The panel noted instances of significant airfare spikes, particularly during festivals or holidays, in its report. It expressed the view that self-regulation by airlines has proven ineffective and suggested empowering the Directorate General of Civil Aviation (DGCA) to regulate air tariffs as a potential solution. At present, the government neither sets nor oversees airfares.

The panel reiterated its suggestion and encouraged the ministry to investigate the practicality of establishing an independent entity with quasi-judicial authority to regulate the airfares set by airlines.

 

Additionally, the report stated that the committee believes exploring route-specific fare ceilings could be beneficial, taking into consideration the interests of both airlines and customers.

“It also recommends that in order to protect the commercial interests of the airlines, the feasibility of modifying the ceiling during the peak/festival season, with prior intimation, may be examined,” the report states.

 

The committee highlighted that revenue management and commercial considerations, such as maximising shareholder value, are the primary factors influencing airfare setting, with passenger interests not factoring into the equation.

 

“Hence, it strongly recommends that Ministry may formulate a mechanism to ensure the compliance of Rule 13(1) of the Aircraft Rules, 1937 and, thereby ensuring a control on surge in airfares. Again the term ‘reasonable profit’ is used without a clear definition or specific criteria, making it a subjective measure,” it noted.

 

The panel also reiterated its belief that the policy regarding price variations for seats on the same flight warrants reconsideration, as it contradicts the principle of fairness.

 

The committee emphasised the need to examine the assertion that unbundling lowers air travel costs for consumers seeking only essential services. It pointed out that while this practice may decrease expenses for certain passengers, it could simultaneously result in higher costs for others who opt for additional services.