Listed Airlines InterGlobe Aviation, SpiceJet and even Jet Airways saw as much as a 5% drop in their share prices on Friday after a Parliamentary panel proposed route-specific capping of airfare and setting up a new entity to exercise control over the ticket rates.

InterGlobe Aviation’s shares slipped as much as 4.73% before recovering and closing 1.23% lower at Rs 3,093.95. On the other hand, the BSE-listed Spicejet closed 2.63% lower at Rs 68.10 but had fallen nearly 5.5% earlier during the Friday session. Jet Airways saw a very volatile session before settling 1.52% lower at Rs 51.95.

The Parliamentary Standing Committee on Transport, Tourism and Culture, in its report tabled on February 8, spelt out measures that the government can take on its recommendations and observations on the issue of fixing airfares.

In the report, the committee noted that there have been various incidents of abnormal rise in airfares, specifically around the festive season or specific holidays. It said that the self-regulation of ticket prices by airlines has not been effective, based on the responses from the Civil Aviation Ministry on airfares. 

The parliamentary panel recommended that the Directorate General of Civil Aviation (DGCA) should be empowered to regulate air tariffs. Currently, airline ticket prices are neither established nor regulated by the government or any regulatory body. 

The committee is of the opinion that a route-specific fare ceiling and the feasibility of modifying the ceiling during the peak or festival season can be examined, keeping in mind the commercial interests of the airlines. 

“The committee urges the Ministry to explore the feasibility of establishing a separate entity with quasi-judicial powers to exercise control over airfares being charged by the airlines,” the report reads further.