NRI have complained that that low fare seats were being priced very high by domestic airlines flying international routes, also charging the Indian Government of ignoring their plight. However, the Indian Government has refused intervention citing that the airfares were market driven and would rise or fall according to the demand.
Emphasising that airfares are driven by market forces, the Indian Minister of State for Civil Aviation Jayant Sinha said, “Government intervening to reduce airfare charged by domestic airlines on international routes will not only violate Indian law but will also be anti competitive”. The Union Minister also said as the demand goes up; the seats on lower fare levels get filled.
Importantly, he was recently responding to a query on whether the government is aware that in certain seasons airlines charge higher than norms in the case of Kerala-Gulf flights and whether the government would intervene. Importantly the MPs from Kerala and other states questioned the aviation minister on whether he was aware of Kerala-Gulf flights charging higher than the limits set.
"An intervention by the government in the matter of airfare reduction of domestic airlines operating on international sector to protect the interest of NRIs (Non Resident Indians) would not only be in contravention of Indian law but also anti-competitive," he informed the upper house of Indian Parlaiment in a written reply.
The Minister of State for Civil Aviation Sinha also said airlines are free to fix reasonable tariffs under the Aircraft Rules, 1937 after taking into consideration all relevant factors including the cost of operational, characteristics of service, reasonable profit and generally prevailing traffic. He said the operation costs, profits, quality of service offered, and prevailing traffic volumes are often considered before fixing the fares.
Airlines remain compliant with regulatory provisions as long as the fare charged by them does not exceed the fare established and displayed on their website, he added.