Government To Confront Airlines' Top Executives Over Reluctance To Share Airfare Data

The Directorate General of Civil Aviation is set to convene a meeting with top airline executives this week after their refusal to share detailed airfare data, seeking clarity and potentially pushing for compliance.

"The data is crucial for analysing prevailing pricing mechanisms amid rising concerns over airfare spikes, especially during major events such as cricket matches, concerts or even festivals," a senior government official told NDTV Profit. "But we currently don't intend to regulate airfare."

DGCA may inspect the current airfare range set by airlines and put in place a more realistic range while conducting monthly reviews, according to people familiar with the matter. The regulator would take a call on whether to accept the aggregate data after further discussing the matter with them.

The development came against the backdrop of India's deregulated airfare, where market forces of demand and supply determine prices. However, the DGCA operates a tariff monitoring unit, set up in 2010, to monitor airfares and ensure that airlines adhere to their declared fare ranges.

In December, the DGCA requested airlines to submit passenger data from the past two years. This data should include fare details, booking dates, base fares, and total passenger counts per flight.

On March 3, the regulator further nudged airlines to share the data to study pricing trends ahead of the peak summer season and strengthen its tariff monitoring unit to prevent any potential predatory pricing by airlines, the people told NDTV Profit on the condition of anonymity.

However, the top airlines have refused to share it. IndiGo, Air India, and SpiceJet, represented by the Federation of Indian Airlines, argue that this sensitive information, if shared with external consultants, could harm their competitiveness, resulting in even financial and strategic setbacks. They are willing to share only broad metrics on pricing based on the percentage of tickets sold, rather than detailed passenger data.

The request for data from the government comes following public outrage over soaring fares to Prayagraj during the MahaKumbh. In the past, the government had intervened, making airlines add flights or slash fares. During Mahakumbh, the airlines inducted more capacity, which brought down fares to Rs 15,000 after having soared to as high as Rs 40,000 for a one-way Delhi-Prayagraj trip.

Similarly, in 2020, the government imposed minimum and maximum limits on ticket prices based on flight durations to prevent ticket prices from spiking due to pent-up demand arising from the easing of Covid-19 lockdowns. These caps were removed in August 2022.

A parliamentary panel had also proposed route-specific capping of airfares and setting up of a separate entity to exercise control over air ticket prices, amid concerns in various quarters about surging fares.

Recently, the government removed a provision in a 2010 circular that allowed airlines to change ticket prices within 24 hours.

In response to questions raised in the Rajya Sabha, Union Civil Aviation Minister said that this flexibility had enabled rapid price changes, which often favoured airlines. The new system will ensure that airlines cannot alter fares at will. Now, the airlines are required to submit their pricing decisions for specific routes to the DGCA a month before implementation.

The government also plans to upgrade the tariff monitoring unit to better detect ticket price spikes, according to a senior official.

An advanced mechanism will serve as an early warning system to detect airfare anomalies, prompting the government to urge airlines to expand capacity on specific routes to prevent fare spikes, the official explained.

A study published in November 2024 by the International Air Transport Association showed that airfares have risen at a slower pace than consumer inflation, especially in comparison to jet fuel costs, which account for about 40% of airlines' expenses.