Airlines to cut highest level domestic fares by 20%

In what would come as respite to passengers, airlines are set to reduce maximum fares by up to 20 per cent.

This follows the Directorate General of Civil Aviation directing these to do so.

"We raised a lot of discrepancies in the fares charged by various airlines, and asked for these to be rationalised. They (airlines) will put up a revised schedule on their respective websites in two days.

"These fares would be 5-20 per cent less than current fares," DGCA chief E K Bharat Bhusan told Business Standard.

All scheduled domestic carriers are mandated to upload their minimum and maximum domestic fares for all routes on their websites every month.

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Noticing a sudden spurt in domestic air fares in recent months, the DGCA had convened a meeting of chief executives of all scheduled domestic airlines to express concern on the exponential increase in air fares charged by a few airlines.

Bhusan said many discrepancies were found in fares, and the issue was raised in the meeting. The average air fare increase, which the regulator termed phenomenal, was despite jet fuel prices rising only 16 per cent in June, compared with June 2011.

Owing to a cut in capacity by Kingfisher Airlines and the peak summer travel season, fares reached a new high. Kingfisher Airlines, the second-largest carrier in terms of domestic passenger carriage, curtailed its capacity, reducing the number of flights from 400 a day to less than 100.

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A release from the government stated it had noticed huge variation in the highest published air fares of different carriers in the same sector.

"Airfares do not show an increasing trend with the date of departure.

"Many a times, fares of higher inventory are opened and then lowered, as the date of departure approaches.

"This may lead to passengers buying tickets in advance paying more than those buying tickets later," said a release from the government.

Even as passenger traffic saw a downward swing in May, compared with May 2011, air fares saw a disproportionate spurt, it added.