Home > Aviation > Wings of Indian Airline Industry to be clipped??

Wings of Indian Airline Industry to be clipped??

Here’s an update on the Indian aviation industry, given the treat of use of powers by the DGCA.

The peak travel and tourism season begins in October each year and lasts till next March. With the onset of the peak travel season, total domestic passengers carried by the scheduled airlines of India rose to 46.17 lakh in October 2010, compared to 39.11 lakh in September 2010.

The airline industry was hit badly by the 2008 global slowdown, which led to fall in passenger traffic. Rising traffic is an indication of revival, particularly in India. Business-related travel was also down earlier due cautious cost approach adopted by several companies.

Given the surge in demand for air tickets this year, domestic airlines raised fares. Reports state that economy class tickets are being priced at Rs 17,917 for one way travel on the Mumbai- Delhi route. Business class tickets on the same route have gone up to Rs 35,000.

Looking at the ‘predatory pricing’ policy followed by the airlines, the Directorate General of Civil Aviation (DGCA) sent a notice to airlines last week, questioning the sudden increase in some fares and asked for a detailed break-up of fares.

DGCA plans to determine a price band for domestic air fares. However, considering that India is more or less a free economy, such a regulation may seem out-of-place.

Also, if the fare are capped, then airlines may fix the floor price, which will be detrimental for for the common man who otherwise booked tickets well in advance at a lower price.

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Categories: Aviation
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