Ministry plans new unit to check air fares

<br /><br /> At the moment the tariff unit in DGCA monitors fares.

Sindhu Bhattacharya July 27, 2012 10:49:20 IST
Ministry plans new unit to check air fares

A new unit may be set up in the ministry of civil aviation to monitor domestic air fares. This, even as the sector regulator DGCA is already monitoring fares regularly.

Official sources told Firstpost that the proposal is aimed at ensuring greater transparency in the pricing of domestic air tickets. But is wasn't immediately clear if the unit in DGCA and this new unit would co-exist.

Ministry plans new unit to check air fares

Controlling fares. Reuters

"Airlines website shows the basic fare. But a passenger does not know by how much the fare is being increased when price of aviation turbine fuel goes up or if there is any decrease in fares if the price comes down. The proposed unit will try and ensure that a passenger gets some understanding on how much of the fare is for the seat, how much is towards the increase or decrease in fuel prices and other charges," these sources said.

At the moment the tariff unit in DGCA monitors fares. The DGCA has a lowest and highest level for the fare which can be charged by domestic airlines for flights operated. In case any airline breaches the upper level of the fare bracket listed by the DGCA, then the airline is warned about this.

The decision has been taken to ensure that there is no profiteering by airline in peak season or due to sudden withdrawal of capacity by any of the eight schedule airline.

The source said everything will be put online but it remains to be seen if airlines are ready to break down fares and tell passengers why a certain increase has happened.

Despite several efforts in the past to prepare such a matrix where each and every component of the fare-how much of the fare is due to ATF cost, how much goes in taxes to the government-has to be disclosed, all efforts remained half baked. The source admitted that though civil aviation has been liberalised and Government cannot be seen dictating fares, the purpose of this exercise is to bring in more transpareancy.

At present, most airline websites show basic fare levels and the fuel surcharge, but no real breakup.

The source said that proposal was at a very "tentative" stage and no final decision has yet been taken on the matter.

But it has been necessitated by the sharp decline in Kingfisher Airline's capacities which has led to all round surge in fares.

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