Tuesday, September 15, 2015

Put an end to fire sales if you want lower airfares: captains of Indian airlines

New Delhi: Captains of India's airline industry are expected to register their discomfort at predatory prices in a meeting slated with top officials of the Ministry of Civil Aviation on Tuesday. Yes, you read that right. Instead of ministry officials reading them the riot act on high air fares, the chiefs of some airlines may turn the tables by requesting the government to put an end to what are commonly known as "One Rupee" fares.
Speaking on condition of anonymity, the chief of an LCC told CNBC-TV18 that if the government wants air fares to not jump manifold when tickets are booked at the last minute and also during festivals etc., it must first control the tendency of some airlines to do fire sales and selling inventory below cost. He said this breeds unhealthy pricing practices, puts airlines' cost-yield equation in peril and forces them to then jack up last minute fares.
Officials at a full service airline have also earlier indicated they would be happier if predatory fares become history.
Top ministry sources had earlier pointed out that they would be favourbaly inclined to consider putting an end to fire sales and predatory offers if the airline industry falls in line as far as the prime minister's directive is concerned. These sources had also indicated that they will ask airlines to significantly lessen the gap between average and highest ticket price on a sector. As of now, the highest price could sometimes be even 10 times the average - officials want this gap narrowed to maybe twice or thrice the minimum average fare.
14/09/15  Sindhu Bhattacharya/First Post
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