MRP ON AIRFARES ANTI COMPETETIVE

Terming supply and demand trends as key triggers for movement in air fares, fair trade watchdog CCI has ruled that the government or the aviation regulator can not be asked to cap the flight ticket prices as that would against the spirit of competition in the sector. "Today, the forces of demand and supply govern the air fares. Whenever supply is more and demand is less, air fares fall and in lean season the airlines do decrease air fares," the Competition Commission of India (CCI) said in an order released today. The order was passed following a complaint against the Directorate General of Civil Aviation (DGCA) and the Ministry of Civil Aviation, wherein they were accused of not having evolved a pricing policy of air tickets like Railways and State Transport Corporations so as to fix MRP of airfares to be charged from passengers by various airlines. Disposing off the complaint, CCI said the complaint does not raise any competition issues and "it is only when demand is more and supply is less that the airlines venture to increase the air fares." "The Commission can neither go into the issue of MRP, that is what should be the MRP for any product or service and fix the MRP, nor the Commission can give direction to the Government of India that it should fix MRP of a service being provided by private entrepreneur. "In fact that will be contrary to the spirit of competition law," the order said. CCI said the complainant had made general allegations about liberty being given to airlines for fixing airfares from time to time, because of which airlines were fixing airfares arbitrarily. "It is alleged that opposite party (Director General, DGCA) gave an uncalled for liberty to airlines to fix their own fares and thus they were arbitrarily and whimsically fixing air fares from time to time," CCI said. CCI was petitioned to intervene into the matter and pass an order directing DGCA and Aviation Ministry to fix MRP for airfares for regular airlines and no-frills airlines separately and to carry out investigations in the matter.