Traveling during festive season is not going to be an expensive affair anymore. The aviation watchdog directorate general of civil aviation (DGCA) assured this on Thursday in the backdrop of plenary session of India- US Aviation Summit to sign a bilateral aviation safety agreement.

It was expected that the trouble in Kingfisher Airlines would generate good business for its competitors but the DGCA has stepped in to monitor the air fare.

DGCA chief E K Bharat Bhushan said that his department will monitor the hike in airfares by other airlines following the crisis in Kingfisher Airlines which led to cancellation of 149 flights.

According to sources the aviation ministry might soon come up with a regulator to fix up fare for airlines.

Bhushan also said that the Kingfisher Airline can not violate the rule to fly on unprofitable sectors. According to DGCA, it is the government that will take a call on Kingfisher deciding to end all unprofitable routes.

The aviation regulator DGCA had sent a show-cause notice to Kingfisher Airlines after it cancelled its flights. The DGCA had asked the airline to show cause the reason for not taking the regulator’s prior approval for curtailing the flight schedules. As per rule 140 (A) of the aircraft rules an airline has to take DGCA’s approval before starting a new route or discontinuing a flight.

Civil aviation min insists on a 24 % cap for foreign airlines

Regarding FDI in the aviation sector Dr Nasim Zaidi, secretary, Civil Aviation Ministry said that the ministry has civil aviation ministry has agreed to foreign airlines picking up stakes in Indian carriers, but is insisting on a 24 percent cap.

Under the current rules, up to 49 percent FDI is allowed in aviation companies by any foreign company which is not in aviation business, but foreign airlines are not allowed to invest.

However, Department of Industrial Policy and Promotion (DIPP) feels that the 24 percent limit will not be able to benefit the sector as it will not let investor to be involved in the functioning of the company.

Investors with more than 25 percent stake can have a say in important decisions.

The DIPP is pushing for at least a 26 percent limit and the Indian industry is pressing for a higher limit of up to 49%.

The decision on this likely to come within two weeks.