Airlines warned against 'predatory pricing'

New Delhi: Sending a strong signal to domestic carriers over abrupt hike in airfares by some of them during periods of high demand, Civil Aviation Ministry today warned them of action if they continued with such "predatory pricing".

The Directorate General of Civil Aviation (DGCA), which issued a directive to all airlines earlier this week, has sent notices to them to explain why such high prices were being charged.

"We will take action against airlines that violate the price band. In fact, DGCA has sent notices to all the airlines. This kind of predatory pricing cannot be justified and it cannot be allowed to continue," Civil Aviation Minister Praful Patel said here.

Replying to questions, he said that in the past few weeks, airlines "have been charging very exorbitant prices on most routes. This is a phenomenon which has been taken serious note of by the Ministry as well as the DGCA".

Patel said the aviation regulator had special powers which "can certainly be invoked if the airlines do not act responsibly in the days to come".

He said officials of the Ministry and the DGCA would meet soon to review the issue and continue monitoring the movement of airfares.

The fares of some airlines went up by as much as 25 per cent post-Diwali.

Patel's statement came days after the DGCA directed the scheduled domestic airlines to furnish route-wise tariff on their entire network in the beginning of each month, in a bid to prevent them from hiking prices abruptly whenever there was heightened demand.

In a circular, DGCA asked the airlines to "furnish a copy of the route-wise tariff across its network in various fare categories, in the manner it is offered in the market, to DGCA on the first day of every calendar month".

Any "significant and noticeable change" in the established tariff already filed, should be reported to DGCA "within 24 hours of effecting such changes", it said.

The regulator asked the airlines to publish air fares on their websites or in daily newspapers on a regular basis. It also asked them to maintain all records pertaining to the established tariff in its office for inspection.

"Insufficient and inadequate information available in the public domain on airfares" and reports of scheduled airlines charging excessive high tariff for flights across their network during the high demand period was "causing lot of inconvenience to the travelling public and drawing adverse comments on airfares", the DGCA circular said.

Last year, when some airlines withdrew their low-end air fares almost simultaneously, moves towards cartelisation was suspected. DGCA had then asked all scheduled carriers to give details and justify their decision to raise the prices.

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