Airlines unable to display number of seats at each fare level

Domestic airlines have expressed their inability to comply with the Supreme Court’s direction to display the number of seats at each fare level and compressing the wide range of prices for a route. The airline chiefs, who met aviation regulator DGCA recently, argued that implementation of the order would be tantamount to regulation of airfares, something which the government has ruled out.

The apex court, in an order on January 23, had taken cognisance of fluctuation in airfares and asked DGCA to make pricing more transparent. The court order had said that it is “We are of the prima facie view that given the wide range of base fares, it would be necessary for DGCA to give a fresh look at the tariff structure submitted to it by the airlines, particularly when in the said table there is no indication as to which fare band would be applicable when the ticket is booked in a period less than seven days in advance. Apparently, no information is made available on the websites regarding number of seats available in each of the bands,” the court order had said.

The court was hearing a case filed by a customer challenging transaction fees charged by airlines in case of online bookings, but expanded the scope of the case to cover airfares. It has not passed a final order. In their meeting with DGCA chief Arun Mishra, the CEOs of private airlines said they follow global practices in fixing the highest fare for a route at about 6-8 times the lowest fare. In foreign markets, the highest fare is sometimes 20 times the lowest fare, they pointed out.

Displaying the number of seats available at each fare level would foster unhealthy competition as each carrier would monitor who was selling how many seats on each route and slash or raise fares accordingly, the airline chiefs argued. Moreover, the technology that airlines use to price seats would not allow fixing a certain number of seats at one particular price point, they said.

According to the CEO of a leading private airline, the number of seats in each revenue bucket is determined by mathematical algorithms that take into consideration many variables, including booking patterns, number of flights in each sector, day of the week, day of the month and many such variables.