Mumbai/Delhi: In a passenger friendly move, the civil aviation ministry has proposed a cap on cancellation fees but airlines are not in favour of the move and said this could lead to fare hikes.
Carriers' input costs are rising due to weak rupee and rising crude oil price but fares have not risen and are 15-20% lower on a year-on-year basis.
Increasing ancillary revenue ( revenue earned from cancellation charges, or excess luggage etc) will help us to keep fares lower, senior airline executives said on condition on anonymity.
A Vistara spokesperson said market forces should be allowed to prevail and airlines be allowed to decide on cancellation fees and baggage allowances considering the competitive nature of industry.
The civil aviation ministry has proposed to cap cancellation charges levied by airlines following passenger complaints. With the airlines discounting to fill up their flights fares have dropped 20-25% and in cases the cancellation charges are higher than the total fare. A couple of months ago airlines hiked the cancellation fee to Rs 2,000-2,250. The Air Passengers Association of India complained about the hike and the Directorate General of Civil Aviation promised action.
Along with a cap on cancellation charges the ministry is also mooting higher compensation in case of denied boarding (currently Rs 2,000-4,000) and enhanced check-in baggage allowance. The ministry is consulting the proposals with airlines and a final decision is yet to be taken.
08/06/16 Aneesh Phadnis & Arindam Majumder/Business Standard
To Read the News in full at Source, Click the Headline
Carriers' input costs are rising due to weak rupee and rising crude oil price but fares have not risen and are 15-20% lower on a year-on-year basis.
Increasing ancillary revenue ( revenue earned from cancellation charges, or excess luggage etc) will help us to keep fares lower, senior airline executives said on condition on anonymity.
A Vistara spokesperson said market forces should be allowed to prevail and airlines be allowed to decide on cancellation fees and baggage allowances considering the competitive nature of industry.
The civil aviation ministry has proposed to cap cancellation charges levied by airlines following passenger complaints. With the airlines discounting to fill up their flights fares have dropped 20-25% and in cases the cancellation charges are higher than the total fare. A couple of months ago airlines hiked the cancellation fee to Rs 2,000-2,250. The Air Passengers Association of India complained about the hike and the Directorate General of Civil Aviation promised action.
Along with a cap on cancellation charges the ministry is also mooting higher compensation in case of denied boarding (currently Rs 2,000-4,000) and enhanced check-in baggage allowance. The ministry is consulting the proposals with airlines and a final decision is yet to be taken.
08/06/16 Aneesh Phadnis & Arindam Majumder/Business Standard
