IndiGo CEO Pieter Elbers has stated that travelers who are asking for lower airfare do not consider the cost of operating an airline. While speaking in an interview, Elbers responded to criticism from the public regarding increasing airfare, stating that it could affect the long-term viability of airlines.
Air Sewa Cell and Market Competition
He was referring to recent reports indicating that the Centre has set up a specialized ‘Air Sewa’ cell to deal with passenger grievances against high airfare.
“To have a body like that is a good thing. Having said that, looking at the Indian market, it’s one of the most, if not the most competitive markets in the world. The average price levels are extremely competitive,” Elbers told.
IndiGo CEO on Airfare vs. Inflation
The CEO of low cost airline IndiGo said that airfares have not increased as much as inflation in the last few years.
“There must be a correlation between the cost of doing business and the price of airfares. Otherwise, you’ll be out of business,” he warned.
IndiGo CEO On Peak Season Demand
In March, a Parliamentary Committee recommended granting the Directorate General of Civil Aviation (DGCA) authority to impose temporary price controls or fines on unfairly high fares by airlines during peak seasons.
But IndiGo CEO Pieter Elbers remarked India needs to go big if it is to establish globally competitive airlines. He added that hotels also charge peak pricing based on demand.
“If we want to build global aviation giants in India, we should also look at the global dynamics we’re operating in, and the kind of airlines we need for that scale,” he said.
“Yes, there are peaks, but so is that in hotels. On average, prices in India remain among the most competitive globally,” Elbers said.
Mahakumbh Pricing and Algorithmic Spikes
Several air travellers had slammed sky-high prices during Mahakumbh. Elbers denied that it was an example of systemic exploitation, calling it a result of demand-based algorithms.
“If there’s one ticket priced at ₹40,000 on a route, that’s occasional. Sometimes these systems push up prices,” he explained.
