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Govt asks airlines to end 'unreasonably high' fares

Civil aviation ministry officials held a meeting with airline executives this week to ask them to devise a mechanism to stop fares jumping on certain routes during busy holiday periods when demand surges, a ministry spokesman said.

Tommy Wilkes | September 16, 2015 | Updated 20:57 IST
Airlines asked to end 'unreasonable high' fares
Picture for representational purpose.

The government will consider capping the price of air tickets if airlines cannot find a way to end 'unreasonably high' fares on some of the routes they fly, a move likely to anger carriers operating in one of the world's cheapest markets.

Airlines fight to get seats filled in a market which is enjoying 20 per cent annual growth in passenger numbers, but where repeated 'price wars' and high operating costs have left most major operators struggling to make a profit.

Low-cost carriers, which include SpiceJet , IndiGo , GoAir and AirAsia India, have offered tickets for less than $10 a flight for travellers that book early, with prices then rising as seats are reserved.

But civil aviation ministry officials held a meeting with airline executives this week to ask them to devise a mechanism to stop fares jumping on certain routes during busy holiday periods when demand surges, a ministry spokesman said.

"We know it is a free economy, but we have suggested to them that it (high fares) is giving a bad name. The government will exercise all options to ensure fares are capped and is determined to do so. We will initially try to do that by mode of consensus," minister  of state for civil aviation Mahesh Sharma was quoted by the Times of India on Wednesday as saying.

Civil Aviation Minister Ashok Gajapathi Raju said he had asked airlines to ensure fares were not "unreasonably high" and that further discussions were scheduled for later this month.

Millions of Indians are flying for the first time each year as the country becomes wealthier, but the price of the average air ticket still remains out of reach for the vast majority.

(Reuters)

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