Re 1 ticket offer by SpiceJet was asked to stop by DGCA immediately

Posted on Apr 2 2014 - 12:50pm by IBC News

New Delhi: Terming SpiceJet’s offer of rupee one fare across its domestic network as “predatory” and a “malpractice”, aviation regulator DGCA on Tuesday came down heavily on the no-frill carrier and asked it to stop such pricing immediately. Hours after SpiceJet offered fares as low as rupee one valid for domestic travel till next year, the Directorate General of Civil Aviation (DGCA) shot off a strongly-worded directive to the airline asking it to stop the three-day offer “immediately”.

Such pricing was “not only predatory”, but it amounted to “malpractice” under Rule 135 of the Aircraft Rules relating to air tariff, official sources said.

The fact that only one or two seats were being offered on each flight at the rate of one rupee amounted to “deceiving the travelling public”, they said, adding that the airline was making such an offer for 91 sectors across the country.

Rule 135, under which the directive was issued, says: “When the Director General (of Civil Aviation) is satisfied that any air transport undertaking has established excessive or predatory tariff…or has indulged in oligopolistic practice, he may, by order, issue directions to such air transport undertaking.”

The sources also reminded that such one rupee tickets were earlier offered by the erstwhile Air Deccan, which was making losses and was later bought over by liquor baron Vijay Mallya’s Kingfisher Airlines that has now folded up.

SpiceJet, which posted a Rs 171 crore loss in the December quarter, has been virtually leading a fare war in the aviation sector since January by making similar offers, forcing other airlines to follow suit.

Apart from the latest rupee one offer, the airline also announced two special schemes, offering the travellers Rs 799 and Rs 1499 ticket prices, excluding taxes and airport fees, with a booking window of three days, starting from Tuesday. The travel period for the tickets booked under these schemes would remain valid till March 28 next year from this July.