Govt won’t allow airlines to indulge in predatory pricing in Go First aftermath: Scindia

After asking airlines to self-monitor a surge in fares, the government is keeping a close watch on the situation to prevent predatory pricing by airlines, Civil Aviation Minister Jyotiraditya Scindia said on Wednesday. 

The minister said that the civil aviation sector in India, as in the rest of the world, was a seasonal industry with demand increasing from October to January to cooling down till April before it again revived with the onset of school holidays in May. 

However, there had a been twin demand increase due to a combination of factors this year. 

“One, we are operating in a high season. Secondly, Go First, which used to operate on 315 routes, is no longer operating those routes. Therefore, we have had a capacity squeeze in airline seats,” said Scindia. 

This culminated in a tremendous amount of demand coming to the fore with the average seat load factor experiencing an all-time high, leading to an unparalleled surge in ticket prices. 

Low-cost carrier (LCC) Go First suspended operations after announcing that it was filing for insolvency on May 2. 

“Generally, in India, we have experienced seat load factors of 80-84 per cent in high season. We are currently operating with 94-95 per cent seat load factor,” he said. 

Scindia said that permissions had been granted for the deployment of additional flights on 68 routes to ease the seat shortage, particularly on flights from Delhi to Srinagar, Mumbai, Pune, Ahmedabad and Leh. 

“Most [domestic] airlines have algorithms that are set for ticket prices. These algorithms are international and they work on Reservation Bucket Designator (RBD). I took a meeting on May 5 with all our airlines and urged them to rationalise pricing,” he said. 

The airlines were also asked to keep their prices in check for destinations that had unforeseen incidents, as was the case with Imphal in the aftermath of violent clashes between different tribal groups, and Bhubaneswar following the train crash in Odisha’s Balasore district. 

“And I am happy to say that post that meeting, the maximum prices on the Delhi-Srinagar, Delhi-Leh, Delhi-Pune, Delhi-Ahmedabad and the Delhi-Mumbai routes have dropped between 14-61 per cent. And that is something that the [regulator] the Directorate General of Civil Aviation (DGCA) and my ministry are monitoring on a daily basis,” he informed. 

The minister said that in the aftermath of the situation created because of the suspension of flights by Go First, airlines won’t be allowed to charge predatory pricing. 

Responding to a query on the resumption of flights by Go First, Scindia said that was entirely dependent on the airline meeting all the stipulated requirements. “We are hopeful that they commence operations. They had submitted a plan and we had raised some queries. They are supposed to respond to those queries and once the DGCA examines their responses, then we shall move forward,” the minister said.