Airlines lock horns over norms on flying to remote destinations

作者:Emily 日期:2017-12-29 標籤: 分類:阅读:72

IndiGo, Jet Airways and GoAir have opposed a proposal that will allow airlines to trade seats between themselves so as to comply with existing government regulations on seat allocation.

According to a Business Standard report, the government needs airlines to have seat allocations based on three categories.

Category-I routes are the profitable routes linking metro cities. Category-II routes are those that are less frequently visited. This includes the states in the North East, Jammu and Kashmir, and Lakshadweep. Category-III represents the most popular cities after the metros like Coimbatore, Kochi and Pune.

According to the rules, airlines have to deploy at least 10 percent of the capacity they deploy on Category-I routes to Category-II routes. Similarly, they have to deploy 35 percent of the capacities deployed on Category-I routes on Category-III routes.

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The report stated that Vistara was unable to meet these guidelines last month. The airline, which operates as a luxury carrier, increased its flight frequencies on many metro routes, which would ideally mean a proportional increase in its other routes as well.

This has prompted lobbyists to push for a proposal that will allow airlines to buy seats from other airlines, if they fall short of route dispersal guidelines mandated. A similar scenario is when banks trade between themselves to complete their target of lending 40 percent of total loans to priority sectors like agriculture and small enterprises.

Vistara was buying seats from its sister companies AirAsia India and SpiceJet, both of which have additional capacity on such routes. As a result, the airline's competitors believed it was enjoying an unfair advantage. Among the airlines that cried foul when this came to light were IndiGo, Jet Airways and GoAir.

「The buyer will benefit and use these benefits to create distorted competitive dynamics. The seller will also have undue benefit in these markets by making their capacity more viable,」 a document signed by the three airlines read.

Currently, Vistara’s 17 aircraft fly to 21 destinations across the country. So when the government increased the number of Category-I routes from 12 city pairs to 20, the airline was put under a lot of pressure because it was forced to deploy even more capacity to Category-II and Category-III routes.



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