New Delhi: Regulators in India are known to crack down when prices go up. The rationale being that sky-high prices hurt consumers and help companies make supernormal profits. But for the first time in India, a regulator has stepped in to prevent companies from cutting fares.
Budget carrier SpiceJet may have brought cheer to fliers with a scheme offering a million tickets for 2013 each, but the aviation regulator has ensured that other airlines, who wanted to follow SpiceJet, didn't go through with their planned cuts.
Officials in the aviation ministry said the Director General of Civil Aviation (DGCA) contacted all airline CEOs in the evening of January 11, the day SpiceJet launched the three-day scheme. He advised them against succumbing to the trend.
DGCA officials said they thought it right to intervene as fares would have become distorted and they had to protect the industry from bleeding any further, just like they do when fliers complain of sky-high ticket prices during peak seasons.
The move explains why IndiGo and GoAir, which were about to announce discounts, withdrew their plans.
17/01/13 Anindya Upadhyay/Economic Times