Airlines charging exorbitant fares but it should be challenged before CCI: Kerala High Court

The Kerala High Court on Monday voiced its concerns about exorbitant air fares being charged by airline companies, particularly during holiday season [Kerala Pravasi Association v. Union of India & Ors.].A bench of Acting Chief Justice A Muhamed Mustaque and Justice S Manu said that airline operators seemed to take advantage of the huge population of expatriates from Kerala who reside in the Middle East. "It is true (that) it is happening in India. Airlines charge us exorbitant amounts during the peak season especially exploiting the Gulf travelers and immigrants," Justice Mustaque remarked.However, the bench made it clear that the proper forum to challenge such fares would be the Competition Commission of India (CCI) and not the High Court. "The law allows Airlines to fix the tariff. But if they use their monopoly in the market then that can be considered by Competition Commission. They can order payment of huge compensation. We are not using it because we have no awareness of competition law. We cannot say this should be the tariff or that you cannot charge this tariff... Tomorrow you can say that tariff should be fixed by kilometer like for an autorickshaw. That may be possible for parliament to do by passing legislation but we cannot say," the Bench orally remarked. .The Bench made these observations when considering a public interest litigation (PIL) petition filed by Kerala Pravasai Association, an association which was formed with the primary objective of ensuring the welfare of expatriates. The petitioner-association sought striking down of Rule 135(1) of the Aircraft Rules, 1937 (Rules) which gives unbridled power to airlines to decide air tariff. They contended that the Rule is arbitrary, vague and violative of the Aircraft Act, 1934 (the Act) as well as Article 14 of the Constitution of India.Rule 135(1) states that airlines shall establish tariff having regard to all relevant factors, including the cost of operation, characteristics of service, reasonable profit and the generally prevailing tariff."It is respectfully submitted that unfettered powers have been given to the airline to establish its tariff under the impugned Rule as there are absolutely no guidelines or clarity with respect to the "reasonable profit" and the "generally prevailing tariff". This has led to a situation where there is large scale exploitation of the vulnerable expats...Needless to state, the tariffs are often dictated by the airline which has the larger seat share, thereby resulting in abuse of dominant position," the PIL petition stated. The petitioner also argued that the Rule negates the provisions of the Act that give power to the Central government to make rules for economic regulation of civil aviation and air transport services, including the approval, disapproval, or revision of tariff of operators of air transport services."It is trite law that right to travel abroad is an inseverable, valuable and an integral part of right to dignity and personal liberty as enshrined in Article 21 of the Constitution of India. The rule making power, it is submitted, must be exercised consistent with the scheme of the Act and not repugnant to the main provisions of the statute itself," the petition stated. The petitioner argued that such unreasonable and exorbitant airfares impose restrictions on air travel as a mode of transportation and, therefore, infringe upon constitutionally protected rights of the citizens..However, the Court made it clear that private operators have the right to fix tariffs. But if they seem to be using their monopoly in the market to amp up prices, then that can be challenged before the Competition Commission of India. The Bench also observed that the government is also constrained to formulate the rules within certain parameters because India is a member of the ICAO (International Civil Aviation Organization)."There is an ICAO (International Civil Aviation Organization) with its headquarters in Montreal. India is a party to their regulations. They have certain directions which is exactly what government follows. Which is probably why they have enacted the Rules like this. The only way of challenging this issue is through Competition Law", the Bench remarked..While opining that the petition may not be maintainable as a PIL before the High Court, the Bench agreed to list it again along with connected petitions..The petitioner was represented by advocates Sradhaxna Mudrika, V Shyamohan, Kuriakose Varghese, Bincy Job and Kaveri Mohan.