Friday 2 November 2012

Captain Gopinath Puts the Spanner in the Works: Blames FIA for Catelization of Ticket Prices


In a scathing attack on the way the aviation industry functions in India, the former founder of the Air Deccan and an old industry veteran, Captain Gopinath, has blamed the Federation of Indian Airlines (FIA) for behaving like a cartel and charging that the airlines under its ambit fix the entry level prices among themselves. These serious charges are likely to dent the image of the aviation industry of the country and raise a public outcry as customers have been taken for a ride, if these charges are established to be true. The passengers normally assume that the airlines operate the cheap flights under competitive environment. However, Captain Gopinath has blamed the low-cost carriers and the full-service carriers of colluding with each other and for maintaining almost same prices of the entry level air tickets.

In the light of this blame, one can recall that the airlines have been asked in the past by the regulator and also by the Ministry to restrain the rapid price increases. The regulator has even tried to take measure to make it mandatory for airline to disclose its price band. There has been initiation of investigation into these charges as well but these were not conclusive of any wrongdoing.

Meanwhile, both the full service and the low cost carriers have refuted the charges. IndiGo has said that in the age of internet, where the customers can check and compare the prices across different airlines, evolution of a cartel is not possible. Spicejet, another LCC which provides the domestic and international cheap flights, puts it straight that since cartelization is done for making profits, every airline would be have booked profits. Rather, the picture of the financial health of airlines is very dismal. 

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