"In India's Free Market, When Demand..": P Chidambaram On Rising Airfares

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Senior Congress leader P Chidambaram on Sunday took a swipe at the government over rising airfares, saying that in free markets, when demand increases, supply will increase, but in India’s free market, when demand increases, prices will increase.

The Congress has been attacking the government, demanding concrete action over rising airfares.

In a tweet, Mr Chidambaram said, “Delhi-Chennai Business Class air tickets on Vistara and Air India have been set at a ‘reasonable’ price of Rs 6300 and Rs 5700 respectively. Oops, sorry, they are set at a ‘very reasonable’ Rs 63,000 and Rs 57,000 respectively.” 

“In free markets, when demand increases, supply will increase. In India’s free market, when demand increases, prices will increase,” he said.

Airlines will expand their routes, curtail flights on old routes and jack up prices, the former finance minister said.

“India will be the Vishwaguru to the world on monopolistic capitalism,” he said.

In another tweet, after many criticised him for quoting business class fares, Mr Chidambaram said, “I have the prices for Economy class too. On the SAME day and on the SAME route, the prices are 28,000 (AI) and 12,000 (VISTARA).” 

“As usual, the bhakts have missed the central issue. The issue is not who travels in what class. The issue is, why are fares rising practically every week? And why is AI charging Rs 28,000 and Vistara charging 12,000 on the same day and on the same route?” This is what a monopoly or a duopoly does, he said.

“In a free market, there must be competition. The more intense the competition, the better it will be,” Mr Chidambaram said.

In recent weeks, there has been a surge in airfares on certain routes, mainly due to a capacity crunch and suspension of operations by crisis-hit Go First.

Against this backdrop, concerns have been expressed in various quarters, and the Civil Aviation Ministry on June 6 asked airlines to devise a mechanism to ensure reasonable pricing of air tickets.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)



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