Airlines warned against predatory pricing

New Delhi, March 13 (IANS) The government has advised domestic airlines not to go in for predatory air fare pricing as several 737-MAX aircraft were grounded due to safety reasons in the wake of a plane crash in Ethiopia.

The development comes after India suspended operations and overflight permission for all Boeing 737-MAX aircraft in India from 4 p.m. on Wednesday.

Briefing the media, after a meeting between Civil Aviation Ministry officials with airlines' representatives, Civil Aviation Secretary Pradeep Singh Kharola said that all flights operated on Boeing 737-MAX had been grounded.

"We have advised the airlines... that they should not use it (grounding) as a reason to jack up their fares," Kharola told reporters here.

"They have promised they will go as per normal routine. DGCA has just said that it will be monitoring all the sectors very closely... and after monitoring if it is found that pricing is predatory, an advisory will be issued."

However, airfares are already high. The current developments may further push them up.

"The shortage of planes and high seat occupancies are expected to push airfares north in the short term. The fares were at least 15 percent higher this year compared to last year. Owing to the current situation, they are expected to rise further this season," said Sharat Dhall, COO (B2C) of Yatra.com.

"At least 50 planes are out of action or grounded on the domestic front owing to multiple reasons. That is a significant reduction in domestic airline capacity. The additional capacity coming in is not likely to cover this in the short term, while demand is going to be robust over the next few months due to school holidays and surging leisure travel," said Dhall.

The grounding led budget airline SpiceJet, which has 12 such aircraft, to cancel 14 flights on Wednesday.

In India, SpiceJet and Jet Airways operate 17 Boeing 737-800 MAX aircraft -- Spice (12) and Jet (5). A part of Jet fleet has already been grounded due to various reasons.

"We are evaluating options for augmenting capacity in the coming days through a mix of additional flights and aircraft inductions. We are sure our operations will be normal very soon," Spice said in a statement.

"Complying with the DGCA directive, SpiceJet has grounded its entire B737 Max fleet. A majority of passengers affected as a result of these cancellations have been accommodated by SpiceJet on alternate flights."

India joined the UK, Singapore, Indonesia, Ethiopia, Australia and the EU nations in the grounding.

The global grounding of the Boeing fleet follows the crash of an Ethiopian Airlines' Boeing 737-800 MAX flight on Sunday killing all 157 people on board.