Parliamentary panel orders probe into 'unreasonable' air fare hike

NEW DELHI: Charging most Indian carriers with "unreasonably" hiking air fares, a parliamentary panel has sought a probe against them and recommended that any increase in ticket prices should be approved by aviation regulator DGCA in the future.

Noting that "most of the airlines operating in the country had been overcharging the passengers by increasing the air fares unreasonably", the panel sought an investigation into the fare hikes by all airlines and said those found guilty may be penalised.

It also said the excess amount the airlines have collected "by way of exorbitant passenger fares may be identified".

In its report tabled in Parliament last week, the Standing Committee on Transport, Tourism and Culture recommended that "in future all the airlines may be asked to increase their fares only with the approval of DGCA."

It said a "transparent formula" for pricing of air tickets should be evolved and "implemented within three months."

In response to civil aviation ministry's comments that the DGCA plays a monitoring role and ensures that airlines display the fares of various categories, the committee, headed by senior CPM leader Sitaram Yechury, said the recent initiatives by DGCA in this regard "has not received much response from the travelling public".

It also asked DGCA to ensure that airline operators "do not indulge in unfair trade practices in fixing airfares during festival and other peak seasons much to the discomfort of the travelling public".

This winter peak season, air fares have risen by almost 25-30 per cent, primarily to due to high jet fuel prices, with the ministry asking airlines to make public the pricing system of various fare slabs under which airlines bunch tickets for sale.

The aviation regulator has a cell which regularly monitors the air fare rates of all airlines on the basis of the lowest and highest fare brackets submitted by the carriers themselves.

http://timesofindia.indiatimes.com/business/india-business/Parliamentary-panel-orders-probe-into-unreasonable-air-fare-hike/articleshow/17543471.cms

Jet to open aviation academies in Delhi, Kolkata

Private carrier Jet Airways, which expects its aviation academy to be functional from early next year here, has said it will set up similar centres in Delhi and Kolkata to cater to the growing in-house and industry demand.

“We have received provisional clearance for our aviation training academy and we expect to receive a formal nod from the Corporate Affairs Ministry shortly,” sources close to the development told PTI.

Initially, the airline had planned to set up the academy in Mumbai alone. “But with queries coming in from other cities, we have decided to expand it to Delhi and Kolkata as well along with Mumbai,” the sources said.

In its 2012 annual report, the Naresh Goyal-owned carrier had told its shareholders it will create two subsidiary ventures for setting up a marketing services company and an aviation training academy. The academy will run certificate courses, ranging between one-and-half month to three months in the areas such as cabin crew, airport services like ticketing, check—ins, and security apart from crew resources management and personality enhancement.

“Our efforts will be to absorb these students, passing out from the academy, within the airline. Besides, we will also help them get jobs at other places,” they said. The whole idea is to make these centres a common platform with courses in pilots and engineering training going forward, they said.

“Going by the orders placed by domestic carriers for planes, demand for these jobs is expected to rise multi—fold in the year to come,” they added.

http://www.thehindu.com/todays-paper/tp-in-school/jet-to-open-aviation-academies-in-delhi-kolkata/article4182656.ece

No cartelisation among foreign airlines: Tribunal

NEW DELHI, DEC 9: 

The Competition Appellate Tribunal has said there is no evidence of cartelisation among foreign airlines operating on international routes from India in their decision to stop paying commissions to travel agents.

Hearing an appeal by the Travel Agents Association of India (TAAI) against an order by the Competition Commission of India (CCI) in the matter, the tribunal ruled that “there was no evidence of any cartelisation whatsoever”.

In its order passed on December 7, the COMPAT also upheld the CCI decision that these airlines cannot be viewed “as a group or enterprise” and none of the carriers was individually dominant in their market.

In their appeal, TAAI had claimed that nine international airlines — Lufthansa, Air Canada, Austrian Airlines, Air France, Continental Airlines, NorthWest Airlines, KLM Royal Dutch Airlines, Swiss International and Singapore Airlines — used to pay commission of up to 5 per cent on sale of tickets to the travel agents.

The agents had complained to the CCI that these airlines discontinued the commission payment after they “formed a cartel and were also abusing the dominant position.

It had further alleged that airlines were intentionally not enforcing the transaction fee system which was a model introduced by them in lieu of prevailing commission system.

However, the fair trade regulator CCI had rejected TAAI’s allegations of abuse of dominant position by these nine airlines in the international flying market and ruled that there was no evidence of cartelisation among these carriers.

TAAI, a lobby group of agents, had accused that these airlines had monopolised the market and were imposing “discriminatory and unfair” conditions on ticket sales.

Dismissing TAAI’s plea, COMPAT has upheld CCI’s position that all the foreign airlines could not be viewed as a single group or enterprise and said “none of these airlines was individual dominant in the market”.

“CCI is right in holding that the relevant market for the respondents (airlines) was the international routes reaching from and to India from the foreign destination and not a particular route being operated by a particular airlines,” said a COMPAT Bench headed by Chairman Justice V.S. Sirpurkar.

Presenting their cases, the airlines said they had taken their decisions with regard to the commission payments independently and rejected the charges of any cartelisation.

Among others, Singapore Airlines asserted that its decision to implement zero per cent commission was an independent decision based on the recommendations and policy of its head office.

Its counsel Naval Chopra submitted before the Tribunal that there was no agreement between the airlines and the agents.

http://www.thehindubusinessline.com/industry-and-economy/logistics/no-cartelisation-among-foreign-airlines-tribunal/article4180964.ece

Equity crunch: Govt may lower, not abolish airport fee

New Delhi: The government may have to eat crow on the issue of Airport Development Fee (ADF) which was to be abolished by next month at Delhi and Mumbai International Airports. According to sources, instead of abolishing it completely, the civil aviation ministry may have to agree to lower the fee per person but extend the period of levy beyond 2014.

On 16 October, the ministry had directed the Airports Authority of India (AAI) to infuse more equity into Delhi and Mumbai airports, which operate on a Public Private Partnership model with a consortium of private developers owning majority equity in the ventures. The government wants AAI to bring in more equity and also the consortium led by GMR to pitch in so that the ADF is abolished for Delhi.

But while the AAI has agreed to infuse more equity, GMR has said it cannot bring in more funds since its lenders are not advancing more loans.

Left with no choice but to compromise, the ministry may be unable to abolish ADF all together in Delhi from 1 January, as promised.

A senior ministry official told Firstpost, ADF may be reduced if not abolished but no final decision can be taken unless the Airports Economic Regulatory Authority (AERA) takes a view. “The matter is before AERA. In case AERA comes out with a fresh consultation paper in the next few days, it means AERA is willing to reconsider its position. In that case, ADF may be lowered. But lets wait and see what happens”.

If Delhi gets to continue levying ADF for longer, even the developers of Mumbai airport would seek this option.

ADF is a method to bridge the gap in any airport project funding. The expected financing gap for Delhi International Airport (DIAL) is likely to be Rs 1,500 crore if ADF is abolished from January.

Delhi as well as Mumbai airports (which is also a PPP model airport with GVK-led consortium the majority partner) were allowed to collect the levy on an ad-hoc basis for 36 months.

Departing domestic passengers pay Rs 200 and Rs 100 at Delhi and Mumbai airports, while those flying abroad pay Rs 1,300 and Rs 600 respectively as ADF.

http://www.firstpost.com/business/equity-crunch-govt-may-lower-not-abolish-airport-fee-551225.html

Parliamentary panel orders probe into 'unreasonable' air fare hike

Charging most Indian carriers with "unreasonably" hiking air fares, a parliamentary panel has sought a probe against them and recommended that any increase in ticket prices should be approved by aviation regulator DGCA in the future.

Noting that "most of the airlines operating in the country had been overcharging the passengers by increasing the air fares unreasonably", the panel sought an investigation into the fare hikes by all airlines and said those found guilty may be penalised.

It also said the excess amount the airlines have collected "by way of exorbitant passenger fares may be identified".

In its report tabled in Parliament last week, the Standing Committee on Transport, Tourism and Culture recommended that "in future all the airlines may be asked to increase their fares only with the approval of DGCA." 

It said a "transparent formula" for pricing of air tickets should be evolved and "implemented within three months." 

In response to Civil Aviation Ministry's comments that the DGCA plays a monitoring role and ensures that airlines display the fares of various categories, the Committee, headed by senior CPI-M leader Sitaram Yechury, said the recent initiatives by DGCA in this regard "has not received much response from the travelling public".

It also asked DGCA to ensure that airline operators "do not indulge in unfair trade practices in fixing airfares during festival and other peak seasons much to the discomfort of the travelling public".

This winter peak season, air fares have risen by almost 25-30 per cent, primarily to due to high jet fuel prices, with the Ministry asking airlines to make public the pricing system of various fare slabs under which airlines bunch tickets for sale.

The aviation regulator has a cell which regularly monitors the air fare rates of all airlines on the basis of the lowest and highest fare brackets submitted by the carriers themselves.

http://newindianexpress.com/nation/article1372609.ece