KOCHI: A relentless price war has erupted on long-distance routes, including the heavy-demand Kochi-Bengaluru section, as a wave of new entrants, mainly international and national brands, rolled in of late, challenging established players with slashed fares and aggressive promotion.
Now, the complaints of “unfair and predatory pricing” have reached the doorsteps of the Competition Commission of India (CCI), after the Bus & Car Operators Confederation of India (BOCI) took up the issue with Union Minister of Road Transport and Highways Nitin Gadkari.
“It has come to our attention that new entrants in the market, including international brands such as FlixBus, have begun operations in India under the guise of start-ups, and are adopting predatory pricing practices. These companies, backed by substantial financial reserves, are offering fares as low as Rs 99 and Rs 199 for long-distance routes exceeding 500 kms,” the BOCI said in the complaint.
Pointing out that the CCI guidelines prevent an industry from quoting prices below a viable operational threshold, the BOCI further charged that “certain foreign companies” are deliberately adopting such strategies that are detrimental to the domestic bus industry.
“International brands like FlixBus and redBus resort to this practice in the Kochi-Bengaluru sector. They are charging fares half of that of what the STC (State Transport Corporation) charges. They offer tickets for as low as Rs 899 when the STC charges around Rs 1,600.
This practice will lead to the collapse of many existing bus operators. We can’t even cover the operational expenses with this rate,” Rijas A J, vice-president of Intercity Bus and Car Operators Confederation of India, and the owner of Sona Travels, which operates on the Kochi-Bengaluru sector, told TNIE.
The BOCI is the only apex body of All India Bus Operators, and the members own 95 per cent of buses in the private sector.
“They are deliberately underquoting the ticket prices to increase the volume (of commuters) and achieve monopoly. And once they do that they will go for fare hikes,” he rued.
The Ministry of Road Transport and Highways (Transport section) has now forwarded the ‘predatory pricing’ complaint to the CCI chairperson, requesting necessary action.
However, in a letter written to Indore Commissioner of Police, FlixBus contended that the company was operating buses “fully compliant with the All India Tourist Vehicles (Permit) Rules, 2023 and other relevant transport regulations.”