NEW DELHI: The Supreme Court has asked the aviation regulator and the industry to explain
the rationale of imposing charges over and above base fares on airline
passengers, appearing to disregard airlines' defence that
these levies were needed to deal with fluctuating market conditions.
Seeking more clarity on the volatility in airfares and the sharp differences in to and fro fares, the top court also sought to know whether the final rates charged by various airlines were within bands declared by them under the rules.
The Federation of Indian Airlines (FIA), an industry body for airlines, had earlier justified all the extra charges, attributing them to market volatility while denying that the operators were acting in concert and resorting to anti-competitive behaviour. The FIA also said that the Competition Commission had already cleared them of this charge.
But Justices DK Jain and Madan Lokur, hearing a petition that raised objections to the User Development Fee (UDF) being charged by different airlines, went beyond the scope of the petition to ask regulator DGCA, the FIA and the Delhi and Mumbai airport operators DIAL and MIAL to explain the rationale of imposing extra charges on passengers such as UDF, Airport Development Fee and transaction fee.
Lawyer DK Devesh, appearing for petitioner TGN Kumar, said that the top court wanted to know whether all extra charges being imposed on air travellers had statutory backing and whether they were justified or excessive.
The bench, which converted his petition into a public interest litigation and has extended its scope to cover all charges levied on air travellers, asked the FIA to explain the break-up of their tariff structures and its various components. It also asked the airlines body to explain the criteria followed to fix to and fro fares and the minimum and maximum fare for any journey.
The DGCA was asked to explain whether it had taken any action against any airline for violating their tariff bands. The court also asked the regulator to state in an affidavit all circulars and orders issued to airlines on tariff fixation and collection of other charges from passengers.
The DGCA was also asked to clarify whether other charges could be recovered from passengers in addition to the base price and whether they were already included. The affidavits will be filed by Saturday and the case will come up again for hearing on Monday. The court was critical of the various extra charges being levied on passengers.
When FIA lawyer Uday Lalit sought to explain that airlines business was about large investments, the court said: "Any businessman will have to make huge investments. But can you exploit a particular situation? This is what troubles us."
The bench also said that the DGCA as the aviation "watchdog" should ensure that fares stayed within the tariff bands. "They cannot be fluctuating."
The hearing also saw the judges express their opinion on the latest low fares controversy, which has seen the DGCA issue an unusual warning to airlines asking them not to resort to cut-price offers to compete with the one launched by low-cost carrier SpiceJetBSE 0.00 %.
Seeking more clarity on the volatility in airfares and the sharp differences in to and fro fares, the top court also sought to know whether the final rates charged by various airlines were within bands declared by them under the rules.
The Federation of Indian Airlines (FIA), an industry body for airlines, had earlier justified all the extra charges, attributing them to market volatility while denying that the operators were acting in concert and resorting to anti-competitive behaviour. The FIA also said that the Competition Commission had already cleared them of this charge.
But Justices DK Jain and Madan Lokur, hearing a petition that raised objections to the User Development Fee (UDF) being charged by different airlines, went beyond the scope of the petition to ask regulator DGCA, the FIA and the Delhi and Mumbai airport operators DIAL and MIAL to explain the rationale of imposing extra charges on passengers such as UDF, Airport Development Fee and transaction fee.
Lawyer DK Devesh, appearing for petitioner TGN Kumar, said that the top court wanted to know whether all extra charges being imposed on air travellers had statutory backing and whether they were justified or excessive.
The bench, which converted his petition into a public interest litigation and has extended its scope to cover all charges levied on air travellers, asked the FIA to explain the break-up of their tariff structures and its various components. It also asked the airlines body to explain the criteria followed to fix to and fro fares and the minimum and maximum fare for any journey.
The DGCA was asked to explain whether it had taken any action against any airline for violating their tariff bands. The court also asked the regulator to state in an affidavit all circulars and orders issued to airlines on tariff fixation and collection of other charges from passengers.
The DGCA was also asked to clarify whether other charges could be recovered from passengers in addition to the base price and whether they were already included. The affidavits will be filed by Saturday and the case will come up again for hearing on Monday. The court was critical of the various extra charges being levied on passengers.
When FIA lawyer Uday Lalit sought to explain that airlines business was about large investments, the court said: "Any businessman will have to make huge investments. But can you exploit a particular situation? This is what troubles us."
The bench also said that the DGCA as the aviation "watchdog" should ensure that fares stayed within the tariff bands. "They cannot be fluctuating."
The hearing also saw the judges express their opinion on the latest low fares controversy, which has seen the DGCA issue an unusual warning to airlines asking them not to resort to cut-price offers to compete with the one launched by low-cost carrier SpiceJetBSE 0.00 %.
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