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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