Airlines are advised to not practice predatory pricing: Parliament panel proposes monitoring

In order to ensure a perfect balance between the commercial interest of the private airline and the interest of the passengers, a parliamentary panel has asked the civil aviation ministry to cap the upper and lower levels of airfares. The panel also recommended to and ensure that predatory pricing mechanism is not adopted by the airlines under the cloak of free market economy.

"It is to enable the private airlines to grow and at the same time the interest of passengers should also be kept in mind, so that they are not fleeced in the garb of commercialisation," the panel said.

The Department-related Parliamentary Standing Committee on Transport, Tourism and Culture has made the recommendations in its report on the ministry's demand for grants for 2023-24. The report was tabled in Parliament on Monday.

Among others, there have been complaints about sudden surge in air ticket prices during peak travel seasons. The committee also observed that there is no mechanism to reflect the surge in airfares on part of the ministry to control fares on existing Aircraft Rules, 1937. The committee noted that during surge in air fares the prices go beyond the acceptable or justifiable limits of 'reasonable profit and generally prevailing tariff'.

While the government plans to make air transport affordable for the common man and the air capacity is being increased, there is no commensurate expansion of the capacity to bring in aircraft. As per the report, this creates lack of airline tickets considering the high demand and leads to increase in the prices.

“The committee recommends that there should be a mechanism with the ministry such as capping of upper and lower prices to stop the practice of 'predatory pricing' or the sudden surge in prices... even though price buckets are being created as per international aviation norms, a close watch has to be maintained by the DGCA & the ministry and a mechanism should be devised to monitor the websites of various airlines to prevent them from misguiding passengers," it said.

Further, the panel recommended a penalty on private airlines in case they do not publish the correct information regarding fares.

"The committee observes that the Ministry of Civil Aviation has a responsibility to the travelling public and the nation at large to ensure that predatory pricing mechanism are not adopted by the airlines under the cloak of free market economy. The committee recommends the ministry should formulate a pricing mechanism for air fares to ensure that passengers are not charged exorbitant prices," it added.

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