With the repeal of Air
Corporations Act in March, 1994, tariff fixation has been deregulated and
airlines are free to fix reasonable tariffs under the provisions of sub-rule
(1) of Rule 135 of Aircraft Rules, 1937 having regard to all relevant factors,
including the cost of operation, characteristics of service, reasonable profit
and the generally prevailing tariff.
The airfare, in normal
circumstances, is market driven and is neither established nor regulated by the
Government. Air ticket prices generally vary depending upon the market forces.
Airline pricing runs in multiple levels {buckets or Reservation Booking
Designator (RBDs)} which are in line with the practice being followed globally.
Due to dynamic fare pricing, the tickets bought in advance are much cheaper
than those purchased near the date of travel.
The Directorate
General of Civil Aviation (DGCA) is the safety regulatory authority for civil
aviation sector. Under sub-rule (4) of Rule 135 of Aircraft Rules, 1937, where
the DGCA is satisfied that any airline has established excessive or predatory
tariff under sub-rule (1) or has indulged in oligopolistic practice, the DGCA
may, by order, issue directions to such airline.
