Whalesbook
Judicial Scrutiny on Pricing
The apex court's intervention signals a potential shift from the deregulated pricing model that has governed the aviation sector since 1994. Judges Vikram Nath and Sandeep Mehta expressed strong disapproval, citing instances where fares multiplied by three times during festivals like Kumbh Mela and other holidays, deeming it "exploitation."
Petitioner's Arguments for Regulation
The plea, filed by S Laxminarayanan in the case S Laxminarayanan Versus Union Of India And Ors., argues that air travel is now an essential service, not a luxury, particularly for last-minute travel needs due to emergencies or work. It highlighted the opaque, algorithm-driven dynamic pricing systems used by airlines, which disproportionately affect the poor and middle classes who book tickets late. The petitioner drew parallels with essential services like railways and postal services, regulated under the Essential Services Maintenance Act, 1981, contrasting it with the current lack of oversight in airline pricing.
Further issues raised include the reduction in free baggage allowance from 25 kg to 15 kg and the imposition of high excess baggage fees, transforming basic services into revenue streams. The petitioner requested the court to direct the Union government and Directorate General of Civil Aviation (DGCA) to establish binding rules for airfare pricing, control surge pricing, regulate baggage, fix cancellation/refund norms, and create an independent aviation regulator.
Airline Industry's Defense
Responding, the counsel for the airlines argued that the petition was not maintainable, emphasizing the sector's deregulation in 1994, which left fare decisions to market forces. The airline representative stated the petitioner was effectively asking judges to regulate fares in a system consciously left to market forces.
Court's Intervention and Next Steps
However, the bench rejected this, stating that deregulation should not translate into citizen exploitation, and vowed to "interfere in this." The court has granted respondents four weeks to file counter-affidavits and scheduled the next hearing for February 23.