Airlines’ maiden attempt at cartelisation grounded

The maiden attempt by domestic carriers to form a cartel has hit an air pocket even before it could be put to a test flight. According to highly placed industry sources, the newly-formed Federation of Indian Airlines—comprising eight domestic airline companies—had in principle agreed at a recent meeting that full-service carriers like Jet, Kingfisher and Indian Airlines would not price their tickets lower than Rs 2.40 a mile. Low-cost airlines like Air Deccan, SpiceJet and Indigo would not price tickets lower than Rs 2 a mile.
The companies reached such an agreement twice, first to be executed in November 2006. The second attempt was made as late as the first week of January 2007. But the cartelisation broke both times, with low-fare carriers like SpiceJet, Indigo and Air Deccan demanding a free run at the last minute, the sources said.
29/01/07 Atreyee Dev Roy/Financial Express

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