Airlines reluctant to share airfare data with government

Instead of a full disclosure, the airlines have offered to submit an analysis of the percentage of tickets sold in various fare slabs on different routes. DGCA is yet to take a call on airline views which were communicated by the Federation of Indian Airlines (FIA) earlier this month. FIA comprises Air India, IndiGo and SpiceJet.

The civil aviation regulator monitors airfares on select routes on a random basis every month to ensure the fares offered do not exceed the price range declared by airlines. Calls for greater scrutiny of airline pricing have gathered steam over the last few months especially after a massive rise in fares to Prayagraj for the Kumbhmela. This led the regulator to seek airfare data for every domestic ticket issued in the last two years. The airlines are opposing the move. According to FIA, sharing raw or granular fare data has multiple risks including that of exposure to third parties and consultants. This in turn could have serious commercial implications for the airlines as airfare data is crucial for revenue management and network planning.

“We are not averse to sharing information with the government. However, there is a concern over the scope and scale of information which has been requested from us. The purpose of seeking the data is not clear,” said a senior airline executive.

According to officials, the government is not planning to regulate airfares and the idea is to use the airfare data of the past two years for analysis.

Over 31 crore domestic passengers flew in the past two years. Although, there can be upto nine passengers booked in a single ticket, the data request is being viewed by airlines as huge. Akasa Air and IndiGo declined to comment. Air India and SpiceJet did not respond to a query on the topic.

Air travel in India was deregulated in 1994 with the repeal of the Air Corporations Act. The advent of no-frills airlines resulted in the introduction of dynamic pricing which is in practice now. Airlines sell tickets under different fare slabs or fare buckets. Additionally, they make tactical changes introducing additional price points within the existing slabs. However, it is the uppermost slabs which have come into scrutiny with airlines being accused of charging exorbitant fares during Kumbhmela. Parliamentarians too have been pressing for a monitoring mechanism to keep a check on sudden surge in prices during festive seasons. There can be wide variance between lowest and highest fares slabs with a difference of up to 20x. This is something that the regulator is expected to examine.

“Airlines are able to stimulate demand due to dynamic pricing. This has contributed to higher loads and market growth. Previously airline load factors would be between 60-70 per cent when airlines had a single fare for economy and business class.

Putting restrictions on fare slabs could hamper growth,” an airline executive pointed out.