Many MPs want govt to regulate air fares; MoCA 'averse'

Even as sharp movements in air fares continue to raise concerns, the Ministry of Civil Aviation is "reluctant" to regulate the ticket prices on grounds that any such move would be against free market principles.
Currently, airlines have been allowed to fix fares on their own depending on supply and demand.
Sources said more than 100 Parliamentarians have written to the Ministry raising concerns over the movement of air fares over the past six months and most of them were in favour of regulations to control the prices.
Parliamentarians, cutting across party lines from various states, including Jammu and Kashmir, northeast India, Kerala and Andaman and Nicobar, have been raising concerns over the matter from time to time, sources added.

Despite receiving representations from various quarters, top Ministry officials are averse to the idea of regulating air fares and want them to remain market-linked, they said.
Some Ministry officials are "reluctant" as they feel that when there is no such international practice of regulating the price of air tickets, why should India be moving in the opposite direction, they said.

Civil Aviation Minister Ashok Gajapathi Raju, on several occasions in the past, had said that putting caps and floors rates for air fares would have their own implications and that pricing should be left to the carriers to decide.
Interestingly, the Ministry had last year circulated a note for internal discussion where it suggested steps to cap air fare at minimum and maximum levels for the economy class in airlines.

As per that note, the maximum economy class fare need to be capped at Rs 20,000.
However, Minister of State for Civil Aviation Mahesh Sharma had last week pitched for regulating "predatory" air fares rather than having a total pricing control.
"We understand that the predatory price (of air fares) at lower end or higher end should have some regulation. This is my individual opinion but this is subject to discussion and a Cabinet decision has to be taken on this issue.
"...In principle, I feel there should be some regulation on the prices at both ends. Of course we will not totally regulate prices but some regulation has to be there," he had said.

Nevertheless, aviation regulator DGCA recently asked domestic carriers to provide the quantum (percentage) of the tickets sold by domestic carriers at different pricing levels (highest and lowest fares buckets) for each sector over the next few months.
The data collected would be analysed for any "noticeable" trend and consequent action.