The ailing Indian aviation sector is likely to sigh some relief at least at the fares front, as amid calls from various quarters for regulating and capping airfare, the Competition Commission of India (CCI) Chairman Ashok Chawla has said that capping of airfares will violate competition norms as it stifles the movement of market forces.
Chawla said that capping of airfares has no place on the competition side and the prices have to be determined by the market forces as the sector is deregulated. He said that “Capping (of airfare) is antithetical to the policy of deregulation as well as to the whole philosophy of competition and what market determines.” CCI chief further said that “deregulation is where you allow market forces to operate and if you allow market forces to operate and you sought of stifle the market forces saying you will not allow this beyond a level, then actually you are not allowing the full play of market forces.'
Though, government too has emphasized that airfares are not regulated by the government as they are determined by the interplay of market forces, but the Minister of State for Civil Aviation Mahesh Sharma had hinted in recent times that ways were being looked at to curb predatory pricing of air tickets.
Recently, aircraft maker Boeing in its latest report titled 'India Current Market Outlook' has said that the domestic airfare has seen about 23% fall during the period from May 2014 to May 2015. It also said that the fuel prices have decreased by about 33% from their October 2013 peak.