Nathan India assisted India’s Ministry of Corporate Affairs and Ministry of Civil Aviation in defining “predatory” and “excessive” pricing in the civil aviation sector, with particular attention to the pricing of airline tickets. We identified data necessary to monitor prices and other conflating factors, developed a template for collecting and analyzing data, and outlined pricing benchmark models to detect anticompetitive behavior.
We then submitted recommendations in “Economic Regulation of Airline Ticket Pricing.” The report provided an economic rationale for unbundling: it benefits not only consumers as competing airlines offer lower base fares to the price-conscious and charge only for services used, but also airlines as they exert more control over operational costs, and charge customers as per usage of services.
In 2013, the Ministry of Civil Aviation passed an order permitting scheduled airlines to charge separate fees for services such as preferential seating, meals, lounges, checked baggage, sports equipment and musical instrument carriage, and special declaration of valuable baggage.
Our report on ticket pricing was the third in a series undertaken in 2012 for the Ministry. “Research Study of the Civil Aviation Sector in India” was submitted in January and “Aviation Turbine Fuel in India” was submitted in March 2012. Our recommendations on aviation turbine fuel (ATF) are mentioned in the Economic Survey of India 2012-13 (Chapter 11, Paragraph 11.68, Page 253).