Supreme Court Seeks Rules on Airline Airfares to Curb Unpredictable Charges

The Supreme Court of India is examining the regulation of airfares and additional charges imposed by private airlines. A notice has been issued to the Central government, the Directorate General of Civil Aviation (DGCA), and the Airports Economic Regulatory Authority of India (AERA) after social activist S. Laxminarayanan filed a Public Interest Litigation (PIL).

The petitioner argues that current airline practices, including unpredictable fare increases, reduced services, and algorithm-driven pricing, infringe upon citizens' fundamental rights. The petition emphasizes that air travel is often the only viable option for urgent travel or reaching remote areas, making it a "non-substitutable infrastructure service" crucial for exercising fundamental freedoms under Article 21 of the Constitution. Despite aviation being recognized as an essential service under the Essential Services Maintenance Act, 1981, its pricing lacks the transparency and regulation seen in sectors like education or electricity.

The plea highlights how airlines exploit high demand and shortages, leading to drastic fare hikes. A specific instance mentioned is the reduction of free check-in baggage allowance for economy passengers from 25 kg to 15 kg. The petitioner points out a regulatory void, as the DGCA primarily handles safety, AERA regulates airport fees, and the DGCA's Passenger Charter is non-binding. This leaves airlines free to impose hidden fees and unpredictable pricing, particularly during peak demand or crises.

Impact:

This news could lead to greater price stability and predictability for air travelers, potentially reducing revenue streams for airlines from dynamic pricing and ancillary charges. It may prompt a review of airline pricing models and regulatory oversight, impacting the financial performance of aviation companies. For investors, it signals increased regulatory scrutiny and potential operational adjustments for airlines.

Rating: 7/10

Difficult Terms Explained:

• Public Interest Litigation (PIL): A lawsuit filed in a court of law to protect "public interest," such as fundamental rights, social justice, or issues affecting the general public, rather than individual grievances.
• Directorate General of Civil Aviation (DGCA): The regulatory body for civil aviation in India, responsible for safety, air transport, and economic aspects.
• Airports Economic Regulatory Authority of India (AERA): An authority established to regulate tariffs and other charges for airport services.
• Opaque: Not transparent or clear; difficult to understand or see through.
• Algorithm-driven pricing: Pricing determined by complex computer programs that analyze various factors (like demand, time, user data) to set prices dynamically.
• Grievance redressal: The process of addressing and resolving complaints or dissatisfaction from customers.
• Article 21: A fundamental right in the Indian Constitution that guarantees the right to life and personal liberty.
• Essential Services Maintenance Act of 1981: A law that provides for the maintenance of services and supplies essential to the life of the community.
• Ancillary fees: Additional charges for services that are not part of the base ticket price, such as baggage fees, seat selection, or in-flight meals.