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April 24, 2024
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In an interesting move, India’s aviation minister, Vayalar Ravi, prohibited low fare carriers in India from charging extra for seat selection “with a view to maintaining transparency in tariff publication.”  Apparently the progressive low fare carriers in India will not be allowed to innovate, providing further protection to the unprofitable and mismanaged government-owned Air India, which Indian taxpayers are forced to prop-up with little hope of a turnaround.

Unfortunately, Minister Ravi has concluded that either Indians lack the education or intelligence to compare air fares and amenities across airlines, or that ala carte pricing is too difficult for a country with a supposedly strong IT infrastructure to implement on a transparent basis.  In this case, his decision inhibits innovation, rather than let the market choose what is best.  It is a typical “can’t be done” reaction of a bureaucrat rather than the “can do” attitude of innovators.

The real reason, of course, is the continued bailouts for Air India, as any competitive actions that threaten the government-owned carrier with more common sense — such as paying for what you actually want rather than being force-fed an unprofitable product — must be thwarted.  No wonder India’s aviation industry lags behind the rest of the Asia — government interference.  Indian air travelers deserve better.

 

1 thought on “India’s Aviation Minister Vetos “Ala Carte” Airline Pricing

  1. At first I thought the author was joking when I read this:
    “Apparently the progressive low fare carriers in India will not be allowed to innovate”
    Mind you, this is written in the context of a ministerial veto on charging extra for pre-assigned seats.
    Something that, at best, I would term an attempt to copy pricing strategies used by Ryanair et al. The term “innovative” doesn’t come to mind.

    Of course, the Indian aviation market seems excessively regulated.
    Still – on this particular matter I do welcome that such pricing strategies are vetoed straight away. And if the product offered by the competition is truly better I do not believe for a second that they will fail because they’re not allowed to charge extra for seat selection.

    Based on the experience in other countries, it is of course not a technical problem to make pricing transparent. Going by the example that Ryanair and others set, the problem is a lack of *will* to do so. No matter how many court cases are lost on a particular semi-hidden charge, the next one is already waiting. (Like the current €6 online check-in fee.)
    This makes sure the courts have a sufficient raison d’être, but does not at all serve passengers who actually want a good deal on their tickets.
    As this pattern can be oberved around the world, I have no reason to believe that India would be any different if such pricing strategies were to be allowed.

    Reading the conclusion “Indian air travelers deserve better.” almost makes me laugh, because what is says is “Indian air travelers deserve intransparent pricing like everybody else.”
    The only reason to say so in my eyes would be out of spite: “We’re being ripped off and and led to believe we’ve made a great deal, why shouldn’t the Indian people enjoy the same feeling?”

    Do Indian air travelers deserve better than Air India? Absolutely. Does getting something better really hinge on whether or not they’re allowed to be charged extra for seat selection? Absolutely not.

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