Airlines again under CCI lens, face cartelisation probe

The competition regulator is most likely to look into the case as a sector-wide issue and not as one specific to individual airlines.

By: ENS Economic Bureau | New Delhi | Published: May 22, 2015 2:47 am

Airlines face a fresh probe for suspected cartelisation and for the alleged arbitrary hike in airfares, with the fair trade regulator CCI on Thursday saying it needs to get to the bottom of the issue.

As a group of MPs, led by BJP leader Kirit Somaiya, on Thursday lodged a fresh complaint with the Competition Commission of India (CCI) against the air carriers. CCI Chairman Ashok Chawla said that the regulator needs to get to the bottom of the issue to ascertain whether there was a cartel at play.

Speaking to The Indian Express Chawla said, “We are doing the investigation again. This representation will be taken into account and we will very carefully look into all aspects. Earlier also we had done it. A few complaints however have been coming to us so we had started an investigation.”

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Somaiya, who also submitted a complaint against mobile companies alleging that they were indulging in unfair trade practices on issues like net neutrality, said he discussed both the issues in detail with the CCI.

Commenting on complaint against mobile operators, CCI chairman Chawla said, “We will see if they fall within our domain or of telecom regulators.”

“On both the issues, the Competition Commission chairman has assured me that they will go through (the matter) and take necessary action, if required,” Somaiya told reporters after his meeting with Chawla.

He also submitted details relating to some companies in the airline and telecom sectors to corroborate his complaints.

On the airfare issue, Chawla said, “The Commission has looked at it in the past also.

We have not been able to take any action (in the past), because we could not find any evidence of truth … prices may go up and down based on demand and supply. They go up abroad (routes) also. Friday evening it will be high, Saturday morning it will be low… That is ok if that is market-driven. But whether there is a cartel, we have to get to the bottom of that.”

The CCI Chairman further said that there is no doubt that the market is getting concentrated.

“There is no doubt that there is only three or four players —Indigo, Jet, Air India and SpiceJet — while GoAir is a marginal player… So basically, only four or five players are there. These are all signs of… we need to watch closely,” he said.

The competition regulator is most likely to look into the case as a sector-wide issue and not as one specific to individual airlines. With PTI

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