Air fares are determined by the airlines, based on interplay of market forces, and Government has not asked them to suggest any model for "self regulation" of domestic air ticket prices, Rajya Sabha was informed today.
"No Sir. Air fares are not fixed by the Government as they are determined by the airline based on interplay of market forces. Airlines are free to fix reasonable tariff...Scheduled airlines offer different fare buckets for each flight.
"The airline pricing runs into multiple levels buckets or Reservation Booking Designator (RBD) which are in line with the practice followed globally," Minister of State for Civil Aviation Mahesh Sharma said in a written reply.
Shiv Sena Rajya Sabha MP Raj Kumar Dhoot had sought to know from the Government whether it had recently asked the airlines to suggest models for self-regulation to rationalise air fares in the country and if it was so, then also response of the airlines in this regard.
Significantly, Minister for Civil Aviation Ashok Gajapathi Raju had along with Sharma and senior ministry official discussed the "high air fares" issues at a meeting with domestic airlines on September 15.
"We had a very lively discussion on pros and cons, floors and caps (on air fares) with them. And they informed us that they (each airline) will do an internal exercise. Probably, in a week or 10 days we will meet them again and take their suggestions," Raju had told reporters after the meeting.
Sharma too while talking to reporters separately had said the Government would exercise all options to cap fares.
"We know it is a free economy, but we have suggested to them that it is giving a bad name...The government will exercise all options to ensure fares are capped.. And (it) is determined to do so."
He, however, had said "initially we will try to do that by mode of consensus."
Replying further to Dhoot's queries, the Minister said, however, in order to prevent excessive charging and sudden surges in airfares and to promote transparency, domestic airlines are required to display on their respective websites the tariff sheet route-wise across their network in various fare categories as per the DGCA norms.
A Tariff Monitoring Unit has been set up at the Directorate General of Civil Aviation (DGCA) to monitor air fares on certain routes on a random basis. This is to ensure airlines do not charge fares outside the range declared by them, the Minister said.
"The analysis on a random basis has shown that the air fares remained well within the fare bucket uploaded by the airlines on respective websites," Sharma said.
