Lok Sabha Question No. 709 (UNSTARRED), answered on 2023-12-07
Subject: Pricing Mechanism for Air Fare
Ministry: CIVIL AVIATION
Asked by: S. Jagathrakshakan, S. Gnanathiraviam, Kani K. Navas, N.K. Premachandran, S. Venkatesan

## GOVERNMENT OF INDIA

## MINISTRY OF CIVIL AVIATION

## Lok Sabha

UNSTARRED QUESTION NO. : 709

( TO BE ANSWERED ON THE  7th December 2023 )

## PRICING MECHANISM FOR AIR FARE

709.    SHRI S. JAGATHRAKSHAKAN

SHRI N.K. PREMACHANDRAN

SHRI GNANATHIRAVIAM S.

SHRI K. NAVASKANI

SHRI S. VENKATESAN

Will the Minister of CIVIL AVIATION

be pleased to state:-

- (a) whether the Government has taken any initiatives to ensure that the private airlines publish the correct information on their websites regarding fares;
- (b) if so, the details thereof and if not, the reasons therefor;
- (c) whether it has come to the notice of the Government regarding huge  increase  in  airfare  of  thirty  to  forty  per  cent  for  domestic travel in 2022- 23 and if so, the reaction of the Government thereto;
- (d)  whether the tickets to Ahmedabad for World Cup cricket finals went up hundred per cent increase for non-stop and 1000 per cent for one stop or two stops due to dynamic pricing and if so, the steps taken thereon;
- (e) whether  the Government  proposes  to  formulate  a pricing mechanism for air fares to ensure that passengers are not charged exorbitantly;
- (f) if so, the details thereof and the initiatives proposed to be taken by the Government in this regard and if not, the reasons therefor;
- (g) whether the Government has received any complaints or letters in this concern; and
- (h) if so, the details thereof and the measures taken in this regard?

## ANSWER

Minister of State in the Ministry of (GEN. (DR) V. K. SINGH (RETD))

CIVIL  AVIATION

- (a)  &  (b)  To  ensure  transparency  and  aid  the  traveler  make  an informed choice, in line with Sub Rule (2) of Rule 135 of The Aircraft Rules, 1937, Directorate General of Civil Aviation (DGCA) has issued Air Transport Circular 2 of 2010 wherein the scheduled airlines are directed  to  upload  fare  sheet  displaying  fare  offered  across  their network  on  their  respective  websites  and  to  furnish  the  copy  of such tariff established to DGCA on every first day of calendar month and whenever, there is change in tariff.;

DGCA has set-up Tariff Monitoring Unit (TMU) that monitors airfares on selected routes on a random basis by using airlines websites on monthly  basis  to  ensure  that  the  airlines  do  not  charge  airfares outside the range declared by them, under the provision of Sub Rule (2) of Rule 135 of The Aircraft Rules, 1937;

The TMU analysis has shown that the airfares remained well within the fare bucket uploaded by the airline.;

- (c)  The  domestic  airline  pricing  runs  in  multiple  levels  (bucket  or Reservation  Booking  Designator  (RBD))  which  is  in  line  with  the practice followed globally. The lower  fare is available for advance booking  much  earlier  (D-31).  As  time  lapses  and  date  of  journey approaches closer, the fare on higher side is made available (D-7, D1) as per the respective airline policy.;
- (d) The fare comparison data for the sectors Delhi-Ahmedabad and Ahmedabad-Delhi during the world cup as monitored by the TMU is placed at Annexure I;

(e) to (h)  The  issue  has  been  brought  to  the  notice  of  the Government.  As  per  prevailing  regulation, airfares are neither established nor regulated by the Government. With the repeal of Air Corporation Act in March 1994, the process of airfare approval by Government has been dispensed with.  Under  the  provision  of  Sub Rule (1) of Rule 135 of the Aircraft Rules, 1937, every air transport undertaking  engaged  in  scheduled  air  services  is  required to establish tariff having regard to all relevant factors, including cost of  operation,  characteristic  of  services,  reasonable  profit  and  the generally prevailing tariff. Airlines are free to charge reasonable air fares  as  per  their  operation  viabilities  subject  to  compliance  to above said rule.;

- ******

| Date of Travel   | 18Nov.'23 (Fare in INR)   |   18Nov.'23 (Fare in INR) |
|------------------|---------------------------|---------------------------|
| Delhi- Ahmedabad | Average                   |                     19302 |
| Delhi- Ahmedabad | Min                       |                      9178 |
| Delhi- Ahmedabad | Max                       |                     39116 |
| Ahmedabad- Delhi | Average                   |                      6325 |
| Ahmedabad- Delhi | Min                       |                      4091 |
| Ahmedabad- Delhi | Max                       |                     10750 |

| Date of Travel   | 19Nov.'23 (Fare in INR)   |   19Nov.'23 (Fare in INR) |
|------------------|---------------------------|---------------------------|
| Delhi- Ahmedabad | Average                   |                     17735 |
| Delhi- Ahmedabad | Min                       |                      9573 |
| Delhi- Ahmedabad | Max                       |                     30506 |
| Ahmedabad- Delhi | Average                   |                      6417 |
| Ahmedabad- Delhi | Min                       |                      3099 |
| Ahmedabad- Delhi | Max                       |                     20796 |

| Date of Travel   | 20Nov.'23 (Fare in INR)   |   20Nov.'23 (Fare in INR) |
|------------------|---------------------------|---------------------------|
| Delhi- Ahmedabad | Average                   |                     14318 |
| Delhi- Ahmedabad | Min                       |                      7928 |
| Delhi- Ahmedabad | Max                       |                     26050 |
| Ahmedabad- Delhi | Average                   |                     17841 |
| Ahmedabad- Delhi | Min                       |                      9110 |
| Ahmedabad- Delhi | Max                       |                     31999 |

## Note

-  All fares are one-way Economy Class only and inclusive of taxes & fees
-  The fare taken for the sectors mentioned above are for non-stop direct flights
-  Above analysis is based on fares captured on 31,14,7,& 1 day prior to the selected date of travel

|   12Nov.'23 (Fare in INR) |
|---------------------------|
|                      4580 |
|                      2819 |
|                     13094 |
|                     11652 |
|                      6705 |
|                     20796 |

|   12Nov.'23 (Fare in INR) |
|---------------------------|
|                      4580 |
|                      2819 |
|                     13094 |
|                     11652 |
|                      6705 |
|                     20796 |

|   12Nov.'23 (Fare in INR) |
|---------------------------|
|                      4580 |
|                      2819 |
|                     13094 |
|                     11652 |
|                      6705 |
|                     20796 |

|   26Nov.'23 (Fare in INR) |
|---------------------------|
|                     12254 |
|                      5796 |
|                     26510 |
|                      4987 |
|                      3663 |
|                      8910 |

|   26Nov.'23 (Fare in INR) |
|---------------------------|
|                     12254 |
|                      5796 |
|                     26510 |
|                      4987 |
|                      3663 |
|                      8910 |

|   26Nov.'23 (Fare in INR) |
|---------------------------|
|                     12254 |
|                      5796 |
|                     26510 |
|                      4987 |
|                      3663 |
|                      8910 |

## Annexure - 1

| Variation %of 18 Nov.'23 vs. 12 Nov.'23   | Variation% of 18 Nov.'23 vs. 26Nov.'23   |
|-------------------------------------------|------------------------------------------|
| 321%                                      | 58%                                      |
| 226%                                      | 58%                                      |
| 199%                                      | 48%                                      |
| -46%                                      | 27%                                      |
| -39%                                      | 12%                                      |
| -48%                                      | 21%                                      |

| Variation %of 19 Nov.'23 vs. 12 Nov.'23   | Variation% of 19 Nov.'23 vs. 26Nov.'23   |
|-------------------------------------------|------------------------------------------|
| 287%                                      | 45%                                      |
| 240%                                      | 65%                                      |
| 133%                                      | 15%                                      |
| -45%                                      | 29%                                      |
| -54%                                      | -15%                                     |
| 0%                                        | 133%                                     |

| Variation %of 20 Nov.'23 vs. 12 Nov.'23   | Variation% of 20 Nov.'23 vs. 26Nov.'23   |
|-------------------------------------------|------------------------------------------|
| 213%                                      | 17%                                      |
| 181%                                      | 37%                                      |
| 99%                                       | -2%                                      |
| 53%                                       | 258%                                     |
| 36%                                       | 149%                                     |
| 54%                                       | 259%                                     |