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DGCA frowns on Spice Jet discount fares

Mumbai, Jan 17 () : DGCA, the aviation regulator is not happy with SpiceJet reducing fares to Rs 2000.

As soon as the SpiceJet advertisement announcing fares as low as Rs 2100 on all routes it was flying from February to April was published, DGCA stepped in and told the airline to call off the offer. It pointed out that this would set off a price war which would already put burden on the ailing aviation finances.

With Kingfisher not operating, the existing airlines increased the fares and many are showing increase in revenue and if this trend continues it might even show profits. DGCA has said that such price wars would keep foreign investors from investing in Indian aviation.

SpiceJet however argued that after the announcement it was not possible to stop the sale. Low-cost airlines Indigo and Go Air which were ready with discount fares on certain sectors were told by DGCA not to join the price war. Acting on this, these airlines silently dropped the move.

Most of the airlines term SpiceJet’s move as foolish and suicidal because the discounted fare will not cover the operating costs. SpiceJet is not amused with DGCA’s intervention since it reduced fares and not increased it. The regulator had asked airlines to put up the fares for each month in advance on the website. It set up a fare monitoring committee as fares shot up in Diwali season by 250%. DGCA has also told airlines that any new aircraft that it intends to purchase has to get the regulator’s approval.

Go Air wanted to buy seven more aircrafts for international service but it was given permission to buy two aircrafts only.

Kingfisher’s revival plan submitted with NOC from oil companies and airport operators has not impressed DGCA and it has asked the airlines about its funding to start operations with seven aircrafts.

DGCA is also keeping a watch on the Dreamliner aircraft of Air India after this aircraft has run into technical snags in many parts of the world including Japan where it has been grounded.