The proposal by the ministry of civil aviation to create a cell to keep a watch on airfares and report unusual patterns to the Competition Commission of India (CCI) is anathematical to free market principles.
Airlines follow a dynamic pricing strategy of charging passenger fares depending on when a flight is booked or on the simple principle of supply and demand on a particular route at a point of time. For example, one has paid Rs 4,345 from Jaipur to Delhi on some days, and Rs 14,843 on another day. The difference is three times. Many of my bookings were done on one day's notice and I cannot blame the carriers for "overcharging". Such is the character of airline passenger pricing. Sometime in the past, when Kingfisher and Jet Airways decided to code-share, one could suspect collusion - though not necessarily so, as the flight pricing may still have been done on a dynamic basis.
Nowadays, Kingfisher does not fly and the competition to Jet Airways is provided by SpiceJet and Air India on this route, but looking at the timings one is often forced to fly Jet, which is an informed choice. If, however, Jet were to practise predatory pricing and, thus, ensured that the other two airlines would give up flying on the Jaipur-Delhi route, then there would be a case for the CCI to check.
30/07/13 Pradeep S Mehta/Business Standard
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Airlines follow a dynamic pricing strategy of charging passenger fares depending on when a flight is booked or on the simple principle of supply and demand on a particular route at a point of time. For example, one has paid Rs 4,345 from Jaipur to Delhi on some days, and Rs 14,843 on another day. The difference is three times. Many of my bookings were done on one day's notice and I cannot blame the carriers for "overcharging". Such is the character of airline passenger pricing. Sometime in the past, when Kingfisher and Jet Airways decided to code-share, one could suspect collusion - though not necessarily so, as the flight pricing may still have been done on a dynamic basis.
Nowadays, Kingfisher does not fly and the competition to Jet Airways is provided by SpiceJet and Air India on this route, but looking at the timings one is often forced to fly Jet, which is an informed choice. If, however, Jet were to practise predatory pricing and, thus, ensured that the other two airlines would give up flying on the Jaipur-Delhi route, then there would be a case for the CCI to check.
30/07/13 Pradeep S Mehta/Business Standard
