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The regulator's report noted the revenue generated by the airlines by offering the highest fare bucket 'is minimal' compared to the revenue generated in the lower fare buckets
The Directorate General of Civil Aviation’s analysis of airline fares on select routes in 2014 has found no irregularities.
The average fares of all airlines are almost linear due to competition, the DGCA report states.
The average fare is closer to the minimum fare, indicating most tickets sold are not priced exorbitantly, it adds.
The report notes airlines’ revenue from the highest fare bucket was minimal against revenue from lower fare buckets.
The DGCA analysed highest and the lowest fares offered by airlines on 18 routes, including Bengaluru-Mumbai, Delhi-Leh, Kolkata-Chennai, and Chennai-Port Blair.
Airlines are required to furnish route-specific fares in various buckets to the DGCA monthly.
Airlines were also asked to provide revenue figures for the latest report.
Mahesh Sharma, Union minister of state for civil aviation, on Monday met senior airlines executives and said airlines had a “social obligation” to keep fares within limits.
“The DGCA report confirms what the industry has been saying. Structural costs in Indian aviation like jet fuel, aircraft leases and airport charges are high.
Airlines are forced to sell tickets below cost and incur losses quarter after quarter,” said Amber Dubey, partner and India head of aerospace and defence at consultancy firm KPMG.
“Airlines should not sell tickets worth Rs 500 and also Rs 30,000. There has to be a band in which tickets should be sold.
A base price could be decided for a particular route and a proportion of rise or decrease could be permitted,” Sharma had said in an earlier interview to Business Standard, raising concerns over predatory pricing.
Sharma said his ministry would discuss airline fare bands in Cabinet.
