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DGCA asks airlines to simplify and republish fare listings

DGCA asks airlines to simplify and republish fare listings
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First Published: Wed, Dec 08 2010. 10 12 PM IST
Updated: Wed, Dec 08 2010. 10 12 PM IST
New Delhi/Mumbai: India’s aviation regulator has told airlines that the listings of fares on their websites are “not user-friendly” and has asked them to simplify and publish the prices again by Thursday, said two airline executives.
In a communication late Wednesday to the airlines, the Directorate General of Civil Aviation (DGCA) said the publishing of the fares needs to be “simplified” for various categories with seamless uniformity for all carriers and that the listings should include last-day fares clearly spelt out, said the executives, who declined to be named.
This is because the airlines have used their own nomenclatures for the online listings, running up to a dozen different categories, they added.
On Tuesday, all domestic airlines complied with DGCA’s directive to publish monthly airfares on their websites.
DGCA officials could not be contacted immediately for comment on this development, but earlier in the day the aviation ministry said it was examining the fares for any discrepancy.
“Observations on the same will be communicated to the airlines to make it more passenger-friendly so that travelling public have informed choice for travel,” the ministry said in a statement.
“There are some discrepancies which need to be removed. We are taking it up with them (airlines),” said a top government official who did not want to be identified. He declined to specify the nature of the discrepancies.
The online listings give the lowest to the most-expensive ticket prices the airlines would charge, including last-minute fares.
In November, these last-minute fares went for as high as Rs 25,000 a ticket, drawing the government’s intervention.
According to the published fare sheets, airlines continue to charge steep prices on last-minute fares, or tickets booked closer to the departure dates.
For the Delhi-Bangalore route, IndiGo’s highest last-minute fare is Rs 17,999; SpiceJet’s is Rs 19,499 and GoAir’s Rs 27,000. All three are low-frills, low-fare airlines.
Analysts said the vast differences in airfares for similar services and routes, as seen in the complete list of ticket prices published by airlines, may draw more regulatory scrutiny.
DGCA’s rules on tariff state that “every air transport undertaking engaged in scheduled air services shall establish tariff having regard to all relevant factors, including the cost of operation, characteristics of service, reasonable profit and the generally prevailing tariff”.
“From (Rs )17,000-27,000, it is not an acceptable band. You cannot have such a large difference for (a) similar service,” said Mohan Ranganathan, an aviation expert and a member of the government-appointed Civil Aviation Safety Advisory Council.
Kingfisher Airlines Ltd, which offers in-flight entertainment, lounge access and on-board food, lists a maximum fare of Rs 23,150 for the Delhi-Bangalore route; its business-class tickets are capped at Rs 35,650.
G.R. Gopinath, pioneer of the low-cost airlines in India, said an efficient low-cost carrier can meet its cost for a one-hour flight for Rs 2,700 a ticket.
The former owner of Air Deccan, which was acquired by Kingfisher after the low-fare airline struggled for years to turn a profit, said that while DGCA’s motives may be right in seeking an explanation on the fares, the missive seems to have backfired.
“They (airlines) have now put a band on minimum fares also,” he said.
The website listings show that the lowest airfare across routes and airlines is Rs 1,600 and at least Rs 3,095 for Delhi-Mumbai, excluding airport and government taxes.
But by setting minimum fares for everyone to see, DGCA’s move, in hindsight, may benefit the industry as “now nobody can sell below the cost,” said Ranganathan.
An airline consultant, who did not want to be named, said airlines would see good yields even with the last-minute prices falling by 20-25%.
Vinay Gupta, chief executive of travel services company Via.com, said airlines should spread their high fares over a year rather than just during a particular season.
“Airlines have every right to get a fair share of seasonality, but it need(s) to be managed in such a way that it is not charging excessive fares,” Gupta said.
“By merely publishing excessive fares on the website, passenger(s) will not get any respite. Many domestic fares are costlier than some of the international routes,” said Ashwini Kakkar, executive vice-chairman at travel firm Mercury Travels and an industry veteran who was formerly chief executive and managing director at Thomas Cook (India) Ltd.
“The only way this helps is that now the travellers are assured that there is indeed a maximum fare slab, above which any airline will not go, even for spot fares,” said Aloke Bajpai, chief executive of travel website IxiGo.com.
“This should help allay the concerns passengers had on airline collusion.”
tarun.s@livemint.com
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First Published: Wed, Dec 08 2010. 10 12 PM IST
More Topics: DGCA | Airlines | Kingfisher | Indigo | SpiceJet |