Patel rejects airlines proposal for fare hike (Lead)December 3rd, 2010 - 8:51 pm ICT by IANS
New Delhi, Dec 3 (IANS) Civil Aviation Minister Praful Patel Friday rejected a proposal by domestic airlines for a massive hike in air fares and said an economic advisory council would be formed to look into tariff related issues.
“We have decided and put in effect immediately the establishment of a Civil Aviation Economic Advisory Council,” Patel said.
According to the minister, the council would be on the lines of the Civil Aviation Safety Advisory Council set up after the Mangalore air crash.
Patel said the industry should justify the exorbitant increase in prices and that the passenger should come to know the prices on a day to day basis.
“If the fare is Rs.10,000 today and it becomes Rs.20,000 tomorrow, what is the earth shattering reason behind it. There has to be some justification from the airlines,” he said.
He said the economic advisory council would be notified by Monday and its first meeting will be held Dec 10, Friday.
“The council will comprise of representatives at very senior levels - of CEOs (chief executives) and no less, of all scheduled airlines, CEOs of all airport operators, representatives of major industry associations like CII, Assocham and FICCI, representatives of IATA,” he said.
Other representatives of organisations such as consumer forums dealing with passenger grievances and related activities and the regulator, Directorate General of Civil Aviation (DGCA), will also join the council.
In the past few weeks, the regulator received complaints about airlines charging exhorbitant rates for last-minute bookings, sometimes as high as 200 percent of the normal fares. Routes like the Delhi-Mumbai, which accounts for 70 percent of the total domestic air traffic, saw ticket prices shoot up significantly leading to an uproar from consumer forums and passengers.
As a result, the regulator had issued notices to several airlines on ticket prices and asked them to submit their replies by Dec 1.
The announcement of the new council, to be chaired by Civil Aviation Secretary Najib Zaidi, came after aviation companies submitted a proposal which determined air fares by calculating distance travelled between destinations.
“The airlines did come back with some kind of answer (on air fares). The DGCA is certainly not satisfied with the answers which have been provided by most of the airlines,” Patel said while rejecting the airlines proposal.
According to him, DGCA would like to know from the airlines in a more transparent and definitive way about the air fares being charged to the passengers.
“Does a passenger start to calculate distance between Delhi and Ahmedabad or Delhi and Trivandrum, the answer is No. The passenger is only concerned with flying from one city to another, the passengers should not be subjected to these kinds of technicality,” said Patel.
The airlines proposed price bands, including four distance-based slabs, on distances like up to 750 km, 750-1,000 km, 1,000-1,400 km and over 1,400 km.
The new proposed fares for distances up to 750 km on a LCC (low cost carrier) were set at Rs.2,200, while the maximum fare on a full service carrier (FSC) was put at Rs.13,000.
For distances between 750-1,000 km the minimum ticket price is mooted at Rs.3,000 (LCC) - Rs 20,000 (FSC); between 1,000-1,400 km: Rs.4,000 (LCC) - Rs.25,000 (FSC); and over 1,400 km: Rs.5,000 (LCC) - Rs.40,000 (FSC).
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