Prices in India 'most competitive globally'—IndiGo CEO defends rising airfares
What's the story
IndiGo CEO Pieter Elbers has addressed consumers concerns regarding rising airfares in India. Speaking to CNBC-TV18, he stressed that the demand for lower fares often ignores the operational costs of running an airline. This comes amid reports of a new 'Air Sewa' cell set up by the Indian government to address passenger complaints over high airfare rates.
Competitive landscape
Indian market: One of the most competitive globally
Elbers praised the Indian aviation market for being competitive, saying "the average price levels are extremely competitive." Defending IndiGo's pricing strategy, he said airfares haven't increased as sharply as inflation in the past few years. "There must be a correlation between the cost of doing business and the price of airfares," he warned, stressing this relationship is important for business sustainability.
Peak pricing debate
IndiGo CEO responds to proposed price caps
Elbers was responding to a recent recommendation by a Parliamentary Committee, which suggested empowering the Directorate General of Civil Aviation (DGCA) to impose temporary price caps or penalties on airlines during peak seasons. He argued that India should adopt a broader perspective if it wants to develop globally competitive airlines. "If we want to build global aviation giants in India, we should also look at the global dynamics we're operating in," he said.
Demand-based pricing
Response to high prices during Mahakumbh
Elbers also responded to criticism over skyrocketing prices during the recent Mahakumbh festival. He dismissed allegations of systemic exploitation, blaming demand-based algorithms for these high fares. "If there's one ticket priced at ₹40,000 on a route, that's occasional. Sometimes these systems push up prices," he said. Despite these spikes in pricing, Elbers reiterated, "On average, prices in India remain among the most competitive globally."