 (8).png)
2 hours ago
2
ARTICLE AD BOX
Summary
The government has responded to passenger discontent by directing airlines to keep at least 60% of their flight seats free of any extra charge. Regulatory overreach? That depends on the market’s level of competition—and there isn’t enough.
Ideally, the government should restrict its role in any sector to framing the policy under which all players must do business and leave pricing and other strategic decisions to participants. But when a market isn’t well contested, state intervention may be justified.
This is the case with Indian aviation, where the government has gone into the minutiae of seat pricing in the interest of passengers. It has directed airlines to ensure that at least 60% of a flight’s seats are offered free of add-on charges for seat-location preferences and see that those travelling together are seated that way.
This should always have been the practice. But what began as extra fees for prized seats turned into an extractive game once some airlines began to price almost all seats, with only a few left charge-free.
Aviation is a licensed sector, by necessity, which means restricted competition. However, this market’s domination by just two players may have rendered its self-corrective mechanism ineffective. When rivalry is robust, consumer choices shape business results, which motivates firms to serve people well. If that fails, state intervention is fine. But as a stopgap. The real solution is to foster competition in our skies.
English (US) ·