Link airfares to inflation instead of dynamic pricing: Parl panel to govt

Some members of the panel also suggested capping the ticket prices

Some of the members of a Parliamentary panel have suggested that the government should look at linking airfares with inflation instead of dynamic pricing system and also cap the ticket prices, sources said.

The suggestions were made by some members of the Parliamentary Standing Committee on Transport, Tourism and Culture during a meeting with senior officials of the Civil Aviation Ministry on Wednesday.

There have been persisting concerns about steep fluctuations in air ticket prices during festival seasons and calamities.

Against this backdrop, some members of the panel recommended that airfares should be linked with inflation, rather than the prices being determined on the basis of demand, a source, who was present at the meeting on Wednesday, told PTI.

Few members also suggested that ticket prices could be linked with that of Aviation Turbine Fuel (ATF). Members wanted that there should be maximum and minimum limits on airfares on all routes, the source said.

ATF accounts for a substantial chunk of the operational expenses incurred by airlines. In recent months, crude oil prices have been on the rise, adversely impacting the profitability of the carriers.

The source said that some members flagged concerns about rise in air ticket prices during the recent Kerala floods this month. The members also sought a new set of guidelines to ensure that airfares remain as low as possible during the time of a crisis or natural calamity, the source added.

Aviation regulator DGCA had closely monitored airfare movements for flights connecting flood-hit Kerala.

The Civil Aviation Ministry has been maintaining that air ticket prices are based on demand and that the regulator does not have any role in fixing the fares.

On one side,the government is aiming to make flying more affordable for the common man and on the other side, the ticket prices rise with demand, the source said, adding that it is contradictory and unfair.

This model of demand-driven air ticket pricing should be done away with, the source said.

On August 20, Civil Aviation Minister Suresh Prabhu said that the DGCA was monitoring ticket prices for flights connecting flood-hit Kerala but it should not be seen by airlines as micro-management by the government as it was a unique situation of "humanitarian crisis".

The Parliamentary panel is headed by Trinamool Congress leader Derek O' Brien.