Ministry asks airlines to reduce fares

Ministry of Civil Aviation (MoCA), in a meeting held recently in New Delhi, has asked domestic airlines to pass on the benefits of reduced jet fuel prices to passengers by reducing fares.

According to a report in Economic Times (ET) today, MoCA has also instructed the airlines to review their security systems and verify the background of their employees in the light of the recent terror attacks in Mumbai. The meeting was attended by CEOs of various airlines and officials of the Bureau of Civil Aviation Security (BCAS) and the Directorate General of Civil Aviation (DGCA). “We took stock of the entire aviation sector in the meeting on various issues right from Aviation Turbine Fuel (ATF) to security and airlines’ preparedness to land on airports during unusual fog conditions,” M Madhavan Nambiar, Secretary, Ministry of Civil Aviation (MoCA) told ET.

Nambiar further stated that the airlines cannot be forced to slash air fares as it’s a commercial decision of the air carriers. An official present in the meeting said that airlines had been categorically asked to reduce airfares to attract more passengers. “All of us should work together to increase passengers on the aircraft. Fares have to be competitive to fill up seats,” said the official.

According to estimates, there is still about 20 per cent excess capacity in the market that may put pressure on airline operators to slash fares. High airfares and slowdown in major economies has hit the domestic aviation sector. Domestic air traffic declined by 22 per cent to 3.04 million in November this year. Air traffic growth is expected to be negative for this year with the sector witnessing double-digit fall in passengers for the last several months.