To Increase Or Not To Increase The Air Tickets Prices-That Is The Question

If Shakespeare had been into air tickets pricing, he would not have said “to be or not to be”. Rather, he would have always been befuddled by “to increase or not to increase”. Indian aviation is a perfect stage of Shakespeare play where different quarters are mooting their own reasons for increasing or decreasing the prices of the flight tickets.

The Ministry of Civil Aviation is trying to find ways of reducing the prices by cutting down on Central and State level levies on the aviation fuel so that the sector remains financially viable for the airlines to operate the flights by rationalizing the policy and taxation measures. While these cuts are not going to lead the airlines to offer cheap air tickets to the customers immediately, it will help the airlines improve profitability by controlling the effects of fuel price-rise.

Interestingly, the airlines have been demanding the same from the government but when it comes to taking the advantage of situation arising out of the poor condition of competitor airlines, the prices of the flight tickets are increased. Be it the requirements of yield management or making the most of the seasonal high demand for air travel or call it simple opportunism, the airlines take advantage of even a slight chance of making the profits.

And, there are influencers outside the airline-government-customer triad which suggest that the cheap flights need to be taxed so that the funds can be used for social sector. The recent advocacy of some minor levy on flight tickets by UN for aiding the purchase of AIDS drugs for the poor is an example of how the pricing of cheap air tickets gets influenced by various bodies and motives.

Since there are many pulls and pressures on the pricing of flight tickets and most of these have resulted from the extremely dynamic environmental factors, the attempts to achieve a rationalized, simple and perhaps more predictable system of flight prices determination have not been totally successful. The riddle “to increase or not to increase” the fares of flights continue for the modern Shakespeare.