Airlines Need to be Regulated

Airlines Need to be Regulated

By Nazim Humayoon

 

Rs. 15000, yes , fifteen thousand bucks for a Srinagar -Jammu flight after some contingency like snowfall . How far was I travelling? Was I travelling to an another country. No.! Only 300 kilometres. Then why should I pay this much?. Isn’t there regulatory authority to check and control this?
The Srinagar- Jammu circuit and the exorbitant price for this was not an aberration. The same price range was seen for the Srinagar-Delhi route .Various airlines were on a looting spree. This was highlighted by various newspapers of the valley. The question that arises is: Have these airlines taken people for granted or they are doing this as they are being backed and supported by some patron?
All this happened despite the fact there is a regulatory body in India. The directorate general of civil aviation (DGCA) is the regulatory body for civil aviation and it falls directly under the ministry of civil aviation. As of now, it investigates aviation accidents and incidents. But being a regulator does it do anything in the case of travel pricing?
No!
In fact, airlines have been deregulated in terms of pricing but that should not mean they take undue advantage of customers and charge exorbitant prices.
In United States, there is an Airline Deregulation Act , in place, since 1987. This is a federal law and is intended to remove government control over fares and it necessarily means that players in the business cannot loot the customer. Contrary to it, the customers are over priced in India. Uncontrolled pricing ranging from 3000 to 30000 is the consequence of the same.
The civil aviation sector in India has grown widely. Whereas prior to 1992, when the two public sector airlines, namely Air-India and Indian Airlines enjoyed a monopoly in the domestic sector, today around 20 airlines are competing for market share in the rapidly growing domestic and international market. India has more than 20 airlines and they always take commuters for granted due to the absence of a strict price regulator. Whereas price(s) should be dependent on demand and supply of the product but the same dynamic does not operate here. Unnecessary hiking of prices is always what we observe here. The hikes sometimes are in the range of 3000% or more. A counterfactual here can be seen in the example of banks. Since deregulation positive growth has been observed in the banking industry. However, deregulation here does not mean a bank will set an interest rate of 80%. Technically it can, but practically it never will. Given that air travel has been commoditized and willy nilly, most people travel by air nowadays, strict regulation needs to be imposed on airlines in the interests of the consumers.

 

—The author, a Business School student at Kashmir University, can be reached at: nazimm123@gmail.com

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