Airlines asked to explain on price hike by May 25

Economic Times, May 14, 2011

NEW DELHI: Officials of the Competition Commission of India (CCI) will meet private airline officials May 25 to seek their explanation on the sudden hike in fares during the 10-day strike by Air India pilots, an official said.

“Our officers will meet them on May 25. That day we will seek replies from them. This new date was set after our first meeting on Friday, when the airlines’ officials requested for more time,” a senior official with the competition watchdog said Saturday.

Earlier, notices were issued by CCI seeking an explanation from private sector airlines on allegations that they hiked fares to cash in on the strike when thousands of passengers, stranded after their Air India flights were cancelled, had to shell out between 50 percent and 75 percent more for bookings.

“The CCI is currently probing all angles like collusion and predatory pricing. They are expected to give a report by 60 days,” the official said.

Passengers complained that the base fare on a Delhi-Mumbai flight, which goes up to Rs.2,400-Rs.3,000 for last-minute bookings, had gone up to as much as Rs.7,500 on some airlines, resulting in a total one-way cost of Rs.11,500, including various levies.

The CCI also took cognizance of the notification issued by the aviation regulator, Directorate General of Civil Aviation (DGCA), which asked the airlines to publish a spectrum of their ticket prices – including the highest and lowest fares that were permanent and could not be superseded under any circumstance.

Consumer rights protection groups have welcomed the move and said that hiking of prices by private airlines was a common practice which needed to be rectified.

“This is a common practice. But I feel it would be difficult for the CCI to prove any collusion or intent on the part of airlines, as we know demand for seats are high and especially after the Air India strike,” said Pradeep Mehta, secretary general of Consumer Unity and Trust Society (CUTS).

According to some aviation analysts, while Air India’s domestic market share had dwindled to just 14.5 percent, the airline still had considerable presence in terms of aircraft and seats offered on some major metro routes, scarcity of which may have also caused an upward swing in prices.

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