The aviation ministry is set to form an economic cell that will collect this information from airlines and make it public. “If an airline says it is going to sell tickets for Rs 2,000 or Rs 3,000, people should also know many tickets did it actually sell for that money. The new cell is going to be activated in two weeks and will get all this data from airlines. We will make public how many seats were sold at various price levels,” aviation minister Ajit Singh told the press.
The move comes just ahead of the launch of the Indian subsidiary of low cost carrier AirAsia which is known to stimulate the market by really low advance fares.
Airlines, however, are opposing the move. Every airline has different fare levels for each route and prices move to higher levels as an aircraft keeps getting filled. “How we move through the band of fare levels and how many seats are in each price zone is a commercial secret of an airline. Disclosing this is not feasible. This kind of thing does not happen anywhere in the world. The logic for flyers is simple: book early to get low fares,” said an airline official on condition of anonymity.
The directorate general of civil aviation had about four years back asked airlines to make public the range of fare levels for each route every month and also show the various levels it will move between the minimum and maximum range. This was done as after very high fares were charged by all airlines during the Diwali travel season.
The idea was to ensure that airlines set fare levels for each route in the beginning of the month keeping in mind the oil cost and rupee-dollar exchange rate so that fares do not cross the maximum limit when demand surges.
But there is no way to check how many seats are in each fare bucket and whether airlines actually sell a sizeable number of seats for lower prices. Now, whether Ajit Singh is able to make airlines disclose their most sensitive commercial decision remains to be seen. “Our intention is not to regulate fares but to let the public know and decide which airline sells how many seats for various fare levels,” Singh said.
Airlines say they will try to reason with the minister. “As it is running an airline in India is very tough due to excessive taxation on jet fuel and very high airport charges, especially in Delhi. There are only two to three travel periods when an airline can make some money and reduce losses suffered in the low-flying quarters of January-March and July-September. Asking us to disclose how many seats were sold for what amount will be like asking us to shut down,” said an official.
Also, airlines point out that almost 40 lakh to 50 lakh people fly domestic routes every month and keeping data on the fare levels they bought tickets on at different routes will be a “logistical nightmare”.