DGCA mulls fare structure norms

New Delhi: The Director General of Civil Aviation has called a meeting of airlines CEOs next week to discuss a wide range of issues. The meeting would be chaired by civil aviation secretary M Madhavan Nambiar. Among the issues to be taken up is a regulation on how airline fare structures should be communicated to passengers.
Director general of civil aviation Naseem Zaidi said on Friday that the fare structure issue was under examination "and we are thinking about an appropriate regulation for this".
At present, airlines break fares into three components: base fare, fuel surcharge and passenger service fee (PSF). When an airline promotes ridiculously low fares such as Re 1 offers, it essentially means the base fare is Re 1, but the passenger will still have to pay about Rs 3,500. Of this money, only Rs 221 goes to the government as PSF -- the remaining collection goes to the airline kitty -- but the airlines normally refer to the charges other than base fare as "taxes and surcharge". The civil aviation ministry has objected to this practice and sought a simplified fare structure.
The meeting is also expected to take up the issue of "cartelisation". The ministry had alleged that airlines had acted in concert to raise fares simultaneously some weeks back and sought replies from each airline on the matter.
07/03/09 Sindhu Bhattacharya/Daily News & Analysis

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Categories: Indian Aviation- In General Mar 2009