Surge in airfares ahead of holiday season forces CCI to probe cartelisation angle

NEW DELHI: After a surge in airfares ahead of the upcoming holiday season, the Competition Commission of India (CCI) is said to be examining whether carriers may have acted in concert with each other.

“The matter is being probed and the report will be submitted soon by the DG (director general),” said a CCI member who didn’t want to be named. To be sure, a similar inquiry that took place a few years earlier had to be wound up because there was no evidence to suggest cartelisation. With schools to break shortly for summer, airlines have not only increased ticket prices but other charges as well, such as those related to cancellation. Premiums for window and aisle seats have also gone up substantially.



While some lawmakers were agitated enough about this last week to stage a walkout from the Rajya Sabha, a parliamentary panel pitched for regulation of ticket prices to ensure that they remain within a reasonable range.

Travel industry insiders, however, said that rates depend on supply and demand and that the fares offered are transparent enough. The carriers say they follow a dynamic pricing model in which ticket prices are tied to demand.

“The domestic aviation industry has registered an increase in terms of passengers travelling in the past one year. This increase has primarily been due to affordable fares being offered by airlines. Airfares are transparent and cartelisation, according to me, is unlikely,” said Sharat Dhall, president of Yatra.com, India's second-largest online travel portal.

Jet Airways and IndiGo recently announced a sharp increase in ticket cancellation charges. These are up by as much as Rs 2,500 per ticket on IndiGo and Rs 4,000 on Jet in some cases. Indian carriers couldn’t be immediately reached for comment. Delhi-Mumbai fares have risen 25-30% in the past few weeks as people finalise holiday plans. A Delhi-Coimbatore ticket for instance costs about Rs 13,000, up from an about Rs 8,000-10,000 last month. Other destinations have also seen big increases.

The matter came up in the Rajya Sabha last week with lawmakers asking the government to take steps and create a regulatory mechanism to ensure that Indian carriers do not fleece travellers. Dissatisfied with the government’s response, members of the Congress, Samajwadi Party and other groups staged a walkout.