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Parliamentary Panel Proposes Cap on Airfares and Cancellation Charges

The panel on Transport, Tourism and Culture has also accused carriers of not passing on the reduction in aviation turbine fuel (ATF) to customers.

News18.com

Updated:January 5, 2018, 3:21 PM IST
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New Delhi: A parliamentary panel has recommended fixing an upper limit on airline fares, saying the pricing mechanism used in western countries cannot be applied to India. The cap, it said, should be fixed by the Civil Aviation Ministry depending on the sector.

The panel on Transport, Tourism and Culture has also accused carriers of not passing on the reduction in aviation turbine fuel (ATF) to customers.

Other recommendations of the panel included restraining airlines from charging more than 50 percent of the base fare on cancellation. The passenger should be refunded the tax and fuel surcharge as well, the panel said, terming the current system as “arbritrary”.

The panel also raised complaints of non-availability of food and water onboard low-cost airlines and asked airlines that fall in this category to make food available “on demand”.

Disagreeing with the recommendations, Kapil Kaul from aviation consulting firm CAPA said Indian fliers enjoy some of the lowest fares in the world. Speaking to moneycontrol.com, he said, “Every time we get to a festive season or the end of the year, airfares shoot up and there is a lot of hue and cry. But the moment we reach the 7th and 10th of January, consumers enjoy the lowest airfares.”

He added that regulating airfares is not “legally tenable” in India as aviation sector has been facing losses of $10-12 billion and had started turning a profit “just 2-3 years ago.

“There is no merit for regulating airfare,” moneycontrol.com quoted him as saying.

| Edited by: Nitya Thirumalai
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