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'CCI has no reason now to look into pricing of air tickets'

Last Updated: Saturday, March 16, 2013 - 14:50

New Delhi: Emphasising that movement of airfares are determined by supply and demand, Competition Commission on Saturday said that at present it has no reasons to intervene in the issue of ticket prices fixed by airlines.

The fair trade regulator's comments comes against the backdrop of many airlines recently slashing airfares to attract more passengers.

When asked about airfares movement, Competition Commission of India (CCI) Chairman Ashok Chawla said this was something that is determined by the market.

"... As far as we (CCI) are concerned, as on today, there is no reason perhaps to intervene," he told reporters on the sidelines of a conference organised by industry body Assocham.

According to him, the Commission had looked into the issue of airfares.

"Our finding was that the upward or downtrends in passenger fares is due to demand and supply. We have not found any evidence of any combined action or cartelisation by airlines. Our assessment is the market is functioning as it should...," he noted.

Earlier this week, CCI had ruled that government or the aviation regulator cannot be asked to cap the flight ticket prices as that would go against the spirit of competition in the sector.

"Today, the forces of demand and supply govern the air fares. Whenever supply is more and demand is less, air fares fall and in lean season the airlines do decrease air fares," the regulator said in an order on March 14.

The order was passed following a complaint against the Directorate General of Civil Aviation (DGCA) and the Ministry of Civil Aviation, wherein they were accused of not having evolved a pricing policy of air tickets like Railways and State Transport Corporations so as to fix MRP of airfares to be charged from passengers by various airlines.

Disposing off the complaint, CCI had said the complaint does not raise any competition issues and "it is only when demand is more and supply is less that the airlines venture to increase the air fares".

"The Commission can neither go into the issue of MRP, that is what should be the MRP for any product or service and fix the MRP, nor the Commission can give direction to the Government of India that it should fix MRP of a service being provided by private entrepreneur.

"In fact that will be contrary to the spirit of competition law," it had said.


First Published: Saturday, March 16, 2013 - 14:44
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