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Jan 23, 2013, 09.42 PM IST | Source: PTI

SC way on tickets: DGCA may convene meeting of carriers

The Supreme Court directing airlines not to levy transaction charges on air tickets, aviation regulator DGCA is likely to convene a meeting of Indian carriers soon to discuss the issue, official sources said today.

The Supreme Court directing airlines not to levy transaction charges on air tickets, aviation regulator DGCA is likely to convene a meeting of Indian carriers soon to discuss the issue, official sources said today.

Following the apex court ruling, the Directorate General of Civil Aviation (DGCA) is also likely to pro-actively review the airfare bands which determine the air ticket prices depending on when it is bought.

Armed with this ruling, the DGCA would review the fare bands and work out a formula to not only ensure that the passengers get a clear picture of the cost of travel, but the airlines too can undertake viable operations, they said.

Maintaining that the meeting between DGCA and the airlines would be convened "very soon", the sources said all efforts would be made to protect the interests of both passengers and the airlines, most of which are facing a
financial crunch.

Quoting a provision of the Aircraft Rules of 1937, DGCA had on December 17 ordered that no airline would charge transaction fee and "strict action" would be initiated if they continued to do so. The directive of the aviation regulator had come after the issue of transaction fee was raised in the Winter Session of Parliament, with members demanding its withdrawal.

The DGCA circular had then said that the provision in the Aircraft Rules "does not allow any transaction fee as part of air fare. Therefore if any airline charges transaction fee in violation of rule 135 of the Aircraft Rules, as part of air fare, strict action would be initiated against such airline". Transaction fee was introduced by airlines after they adopted a zero commission policy for travel agents.

Under the fee, agents charge customers any amount of their choice and there is no uniformity in it. It can range from Rs 50 to Rs 200 on domestic and Rs 400 to Rs 700 on international tickets.

While restraining airlines from levying transaction fee, the two-judge bench of the apex court made it clear that "the transaction fee shall not be collected from any passenger in any form or under any other name".

The bench rapped the DGCA for not enforcing its own December directive restraining airlines from charging transaction fee from passengers. The apex court also directed the DGCA to examine the tariff structure of the airlines in view of their wide range of base prices for air tickets, observing that there were "several bands for fixing the base price which in certain cases range from Rs 1,120 to Rs 36,000".

"We are of prima facie view that regarding wide range of basic fair, it would be necessary for the DGCA to examine the tariff structure of the airlines," the bench observed. To this, the official sources said efforts would be made to make air fares more transparent so that the traveling public is clear about the cost of travel.

The fare bands range from 12 to 15, with a ticket on Delhi-Chennai route ranging between the lowest band of Rs 4,170 and Rs 22,249 and that between Delhi and Chennai ranging between Rs 3,920 and Rs 17,308.

While there was a need to compress these bands, there was also a need to make the bands transparent by giving some rationale behind the huge differences between the highest and the lowest air fares. The sources said the airlines maintain that apart from the actual costs of air travel, they also have to incur variable costs on inputs like jet fuel, whose prices continue to rise.

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