Tuesday, April 20, 2021

Aviation regulator warns airlines of predatory pricing

The aviation regulator has warned airlines not to indulge in predatory pricing to prop up air travel hit by the second wave of the coronavirus.

Officials of the directorate general of civil aviation (DGCA) said they would intervene if airlines were selling tickets lower or higher than the fare cap in place till the end of this month.

In their meeting with the civil aviation ministry, airline representatives complained that some airlines were selling tickets below the minimum cap, thereby engaging in predatory pricing to prop up passenger load.

After touching a high of about 300,000 in February, daily passenger traffic has fallen below the 200,000-mark on account of a renewed surge in Covid-19 cases, necessitating several states to make the RT-PCR test for passengers mandatory, leading to decline in bookings. The daily passenger traffic before the pandemic was 400,000-450,000.

In February, the government had increased the minimum and maximum fares that airlines can charge in the domestic sector by 10 to 30 per cent, while extending the cap on airfare.

The government has set a price band for airfares since May. The increase is in the region of 10 per cent for a one-way fare at the minimum fare level for a flight of less than 40 minutes to about 30 per cent for a maximum fare for a flight of between 180 minutes and 210 minutes.

Rating agency Crisil said the industry would post Rs 9,500-10,000 crore losses this fiscal, though it will be lower by 35-40 per cent compared with the previous year.

Crisil said air traffic would continue to remain low amid high fuel prices and only a gradual recovery in international operations.

20/04/21 Telegraph

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