Fog delays and cancellations are likely to ring in the new year for fliers. But it will be soaring airfares which they will have to watch out for in the year ahead.
After having run to the government for bail-outs during the economic meltdown, airlines appear to be in no mood to toe the government’s line on bringing fares down to more affordable levels for fliers.
Never ones to miss an opportunity to make money, Indian carriers started charging exorbitant fares even during the peak season.
Airfares, particularly the last-minute or spot fares, rose substantially in October-November with some carriers going for as much as a 400 per cent hike around Diwali on high density routes. This eventually forced the government to intervene.
However, the government had kept mum while the airlines appeared to have cartelised and woke up from its slumber only after the situation turned messy and spun out of a control following an uproar among the travelling public. It was only after this that the government last month issued a stern warning to airlines to reduce airfares within a week or face action.
The high airfares post-Diwali led the DGCA (the Directorate General of Civil Aviation, which functions as the airline regulator) to issue two directives to the airlines-one to reduce fares and the other to maintain transparency by issuing sector-wise and date-wise fare charts so that passengers know what they would be charged when they book.
Private carriers attempted to dodge this by putting up technical fare sheets which could be decoded only by industry professionals.
Meanwhile, airline chiefs accused the government of interfering in the aviation sector.
Kingfisher Airlines’s promoter Vijay Mallya turned hostile, challenging government’s authority over dictating airfares.
Mallya protested government efforts to reduce high fares charged by airlines on tickets booked at short-term notice. He said airfares should not be capped by the regulatory authorities, whether it is high or low.
“There is no case for capping airfares in a liberalised environment, be it at upper or lower band. It is a function of demand and supply. It is not exploitation by the airlines. Airlines are fighting for market share, so demand and supply has to be respected,” Mallya said on the sidelines of a conference organised by the industry body Ficci.
Private Indian carriers have been enjoying concessions, tax rebates, extending of credit period on fuel charges and payment of airport charges besides other benefits as part of the government’s post-recession bailout plan since last year but continue to defy the government on other issues.
“There is no control over the airlines. Even the regulatory authorities and the government seem to have surrendered before the influential corporates running the airlines,” said Rajesh Kumar, a Delhi government employee and a frequent traveller.
“The year has seen a rebound in passenger traffic growth. This has brought respite to the airlines which had been making losses. No- frill carriers especially have benefitted the most. These carriers seem to make- up their losses at any cost. That needs to be checked,” said a top official of the civil aviation ministry.
Courtesy: http://indiatoday.intoday.in
Cinesign's Blog 