June 13, 2021

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Do the airlines in India resort to arbitrary fixing of air fares ?


Air fares in India are not consistently fixed as experienced by a large number of air travelers. For instance, consider an air fare of 1 adult, economy class between New Delhi and Patna :

Date of booking – 18th August 

Air fares available as per date of travel – 

19th August – Rs 7268

10th September – Rs 2525

13th October – Rs 3725

7th November – Rs 7007

As the travel date approaches, the fares increase further. It is a similar story on other sectors also. 

It reveals that the airlines have no other choice but to charge as per the market demand. The airlines and the authorities could have introduced more number of flights when they see a surge in demand and they get sufficient time to schedule their plans.

Consumer rights activist Bejon K Misra has raised this issue of “arbitrary” fixing of fares by the airlines through a PIL seeking capping of air fares charged by airlines in the country. The PIL mentions that the authorities, including the civil aviation regulator, the Directorate General of Civil Aviation (DGCA), were acting as “silent spectators” to the “arbitrary” fixing of fares by the airlines

When summoned, one of the respondents, the DGCA, in its response submitted its reply through an affidavit in the Delhi high court as:

– that the airlines in the country are not charging fares that are unlawful, discriminatory or exorbitant,

– the ticket prices change according to market forces, and

– under the Aircraft Act it was not empowered to make “financial regulations” with regard to air fares.

and urged the court to dismiss the plea since the petitioner’s views regarding charging of exorbitant airfares by private airlines have not been substantiated as the prices charged by them do not exceed the fare buckets (levels) displayed on their websites.

The DGCA had to explain the computation of ‘dynamic’ fares. It said, “Fare increase with increase in demand for seats on any given flight and as a flight’s available seat inventory diminishes, lower bucket fares consequently may no longer be available. The airlines adopt a dynamic pricing mechanism in which prices are changed depending on the day of a week, time of day, numbers of days before the flight and other factors like number of seats and departure time. The prevailing airline practices by private and government owned airlines are same and in line with practices followed globally.”

The DGCA further said, “It is denied that air fares charged by the airlines are unlawful and discriminatory and that the respondents (DGCA and the Centre) have shirked their responsibility.”

The petitioner, Bejon K Misra, in his plea raised the importance of capping of air fares. He has said that capping of air fares or guidelines to regulate them are necessary to ensure “greater transparency and accountability” and “discourage profiteering and undue enrichment in the business of civil aviation”.

He referred to the incident of IndiGo airline cancelling a large number of its flights due to which its passengers were left in the lurch and had to book tickets at the last minute on other airlines at “exorbitant prices”.

Misra has sought that airlines should not be allowed to charge more than a justified hike in the advance booking fare as airlines often charge more than 10 times the base rate when there is a shortage of seats.

A bench of Chief Justice Rajendra Menon and Justice V K Rao heard the case on 17th August and listed the matter for further hearing on October 9.

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