The attempt to form a forum to protect the interests of domestic airlines seems to be falling apart even before it was put together. Representatives of 10 domestic airlines attended a meeting in Mumbai last week to evolve a common strategy since all are losing money. The meeting was initiated by Civil Aviation Minister Praful Patel keeping in mind the crisis facing the airline industry. The owners and CEOs made a gallant effort to bury longstanding rivalries and put on a friendly face for the get-together. Air India chairman V Thulasidas was unanimously appointed chairperson since he is considered the only neutral party as his carrier steers clear of domestic traffic.

The decision to set up a trade body to lobby with the government, which would be based in Delhi, was readily agreed to. The snag was reaching an understanding on the issue of fares. Full service carriers, Indian Airlines, Jet, Sahara and Kingfisher are competing against the low-cost carriers which have built up a market by undercutting the big operators. It was decided that no low-cost airline would charge less that Rs 2 per km, for instance a ticket from Delhi to Mumbai could not be priced below Rs 3600. Although some were initially reluctant to go along with the concept of a minimum price ticket — with one airline protesting that its ticketing policy was totally different from the conventional model — eventually all fell in line.

A day after the meeting, somebody leaked news of the proposal to the Competition Commission which is now thinking of taking up the issue with the civil aviation secretary on the grounds that the about-to-be-formed trade body sounds more like a cartel than a pressure group. At any rate, it will give the under-employed competition commission some much needed work!

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