Keeping Corporate Predatory Behavior in Check

The Indian Civil Aviation Minister has signaled to the Airlines that price collusion and predatory behavior will be investigated. When all airlines raise prices significantly and are priced within a narrow band for a specific segment, suspicions are aroused. What is interesting is the willingness of the government to signal to the industry to "keep it down."

FT.com / Companies / Airlines - India to act over predatory airline pricing: "India’s government has warned domestic airlines that it intends to crack down on “predatory pricing” after carriers sharply increased fares on popular routes during a recent festival, as overall passenger traffic surges.

Indian travellers were outraged during the recent festival of Diwali – Hinduism’s biggest gift-giving holiday – when some carriers charged about Rs25,000 ($550) for a last-minute Delhi-Bombay round trip ticket, a route on which fares usually range from Rs10,000-Rs15,000.

Fares on other popular routes also surged during the holiday period, as local airlines sought to cash in on a newly buoyant market.“This predatory pricing can’t be allowed to continue,” Praful Patel, the civil aviation minister, said at an industry conference in New Delhi on Thursday. “We shall try our best to bring discipline.”Mr Patel said the carriers should have a “price band” for different routes, and warned that the director general of civil aviation, the industry regulator, had “special powers” that could be invoked if airlines did not act appropriately, especially with last minute travellers.The warning comes as India’s airline passenger traffic numbers are soaring after the difficulties of 2008, when carriers – which had been growing at about 25 per cent a year for several years – were hit by surging fuel prices, and plummeting passenger traffic."