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As all the airline carriers continue to report massive losses, Aviation Minister Hardeep Singh Puri has said that “some predatory pricing is taking place” in airfares and the government is concerned that if this continues, more airlines will shut down.
“The interesting thing that we have observed is that on Delhi-Mumbai route 20 years ago the average fare was of Rs 5,100. Today, the average fare is Rs 4,600. Some predatory pricing is taking place. It means people are selling tickets below their cost,” Puri told reporters on Tuesday.
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The minister said that government is not planning to regulate the air fares.
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“One of our concerns is that if there is predatory pricing, then the airlines will stop functioning. This is not Air India’s problem only. Jet Airways got shut down. Before that, it was Kingfisher airline,” he said.
In the second quarter of 2019-20 giant airlines like IndiGo and SpiceJet, reported losses worth Rs 1,062 crore and Rs 463 crore respectively. Other airlines also submitted similar statistics.
Asked if the trend of predatory pricing has come down after regular discussion with the airlines, he replied, “Oh yes, absolutely.”
“It is constant battle. An ideal situation from an airline’s point of view is that they grow and they are also able to charge more fares. What fares they charge is their business. Our advice to them is to charge realistic fares,” he added.
When asked if the government has plans to regulate fares, the minister replied in the negative, saying “No regulation. It has to be done within deregulation system… If I put a cap on fare, the airline will start charging that cap only… that cap will become the normal fare,” adding, “So, within a deregulated structure, we have to bring about equilibrium.”
(With input from agencies)
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