LCC marriages stoke fare play fears

New Delhi: With low-cost carriers (LCC) being eyed by premium airlines, the department of consumer affairs has raised concerns over the impact of such mergers on consumers. Fearing that the acquisition of LCCs by full service airlines may result in higher ticket prices, the department will prepare a note to safeguard consumer interests, which will be sent to the civil aviation ministry.
“LCCs symbolise the empowerment of middle-class Indians and the department will ensure they are entitled to the same fares even if a low-cost carrier is acquired by a premium airline,” said an official of the department of consumer affairs.
The issue has been raised by a member of the parliamentary consultative committee of the ministry of consumer affairs. The member has asked the department to convene a meeting of the consultative committee to take up the issue. Sources said the meeting is likely to be convened early next week. Based on the discussions at the meeting, a note will be drafted and sent to the civil aviation ministry.
The civil aviation ministry, which drafted a set of M&A rules last year, grants approval to a merger between two private carriers after considering issues such as parking slots, hangars and landing rights. If the proposal goes through, private airlines taking over LCCs will be held accountable even for pricing.
18/06/07 Gaurie Mishra & Mayur Shekhar Jha/Economic Times

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Categories: Low Cost General Jun 2007