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No cartel in aviation,CCI eyes re-look

The fares move up and down,mainly during the festive seasons.

Written by Agencies | Mumbai | Published: September 20, 2012 2:22:22 pm

Competition Commission of India (CCI) today said it could take a relook at the issue of cartelization in the airline industry in terms of hike in airfares but maintained that ticket prices generally moved up due to a mismatch between supply and demand.

“The Commission looked at the airfares some time ago,but we found that the fares had moved up and down more because of the market play dynamics and not because of anti-competitive practices,that they had formed a cartel. So if the need arises,the Commission will look into the issue again,” its Chairman Ashok Chawla said on the sidelines of an event organized by industry lobby FICCI here.

Maintaining that the aviation sector was going through a “bit of turmoil”,he said there was a volatility in demand and supply,mainly on account of two large airlines reducing capacity for certain reasons.

He was apparently indicating at cash-strapped Kingfisher and Air India which have reduced capacity for financial problems as well as strikes.

“So when the number of players in a sector goes down,there is always volatility in demand and supply. And that seems to be the main thing happening in the aviation sector,” Chawla,who was Secretary in Civil Aviation and Finance Ministries earlier,said.

He also pointed out that the fares move up and down,mainly during the festive seasons or when there was more demand.

“That need not be a competition issue. In fact,it may reflect more robust competition,” the Competition Commission chief said.

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