IndiGo and SpiceJet Stocks Drop as Parliamentary Panel Advocates Airfare Capping and Regulation

9 Feb 2024 , 02:50 PM

IndiGo and SpiceJet shares faced a decline on February 9 morning following a proposal by a parliamentary panel for route-specific capping of airfare and the creation of a separate entity to regulate air ticket prices.

At the time of writing, InterGlobe Aviation, the operator of IndiGo, was trading 1.09% lower at ₹3,106.25, while SpiceJet was down 2.42% at ₹68.10 on the BSE.

The parliamentary panel expressed concerns over the surge in airfares and stated that airlines were not effectively self-regulating ticket prices.

The Parliamentary Standing Committee on Transport, Tourism, and Culture tabled a report on the government’s actions regarding its recommendations on fixing airfares.

The panel highlighted instances of abnormal increases in airfares, particularly during festive seasons or holidays, leading to the conclusion that the DGCA should regulate tariffs due to airlines’ failure to monitor prices.

Although ticket prices are not directly regulated by the government, the Directorate General of Civil Aviation (DGCA) monitors airfares on specific routes monthly to ensure they fall within the airlines’ declared range.

The committee recommended empowering the DGCA to regulate air tariffs and proposed exploring the feasibility of establishing a separate entity with quasi-judicial powers to control airline fares.

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