Saturday, November 19, 2016

Exorbitant air fares: No limit for metro routes as regional fares capped

Is the airline pricing mechanism fair and transparent in India? Why do people booking at the last minute - for emergency travel specially - have to pay a bomb? Well, the easy answer is that last minute bookings will mean most seats on a flight are already full and therefore, as per flexi-pricing rule followed by airlines, you end up paying a hefty premium for coming on board at a late hour. But how much premium is justified? And who decides if this premium is fair?
According to data complied by online travel aggregator Makemytrip, a one way Delhi-Mumbai air ticket would have cost you a neat Rs 46,973 in September this year. Bengaluru-Delhi would have cost you Rs 46.906 in the same month. These are peak prices, the maximum that has been charged on these sectors in that month. The minimum fare during the month was Rs 2,198 on Delhi-Mumbai flights and Rs 2,395 on Bengaluru-Delhi flights. It is clear that peak pricing is about 20 times the lowest fare.
As of now, there is no control over how much premium an airline can charge for last minute bookings. Civil Aviation Minister A Gajapathi Raju said in a written reply in Lok Sabha yesterday that airlines are free to fix "reasonable" tariff under sub-rule (1) of Rule 135, Aircraft Rules 1937 having regard to all relevant factors including "cost of operation, characteristics of service, reasonable profit and the generally prevailing tariff." He also said that airlines remain compliant with the regulatory provisions of Sub-Rule 2 of Rule 135 as long as the fare charged by them does not exceed the fare established and displayed on their website.
18/11/16 Sindhu Bhattacharya/F.Business
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