March 9, 2018 TnH Global

CCI fines Jet Airways, IndiGo, SpiceJet for unfair business practices

CCI says penalties have been imposed on the airlines for concerted action in fixing and revising fuel surcharge (FSC)—a component of freight charges.

The Competition Commission of India (CCI) recently imposed a total fine of more than Rs. 54 crore on Jet Airways, InterGlobe Aviation and SpiceJet for unfair business practices with respect to fixing fuel surcharge on cargo transport.

Besides, the watchdog has directed the three airlines to “cease and desist” from anti-competitive practices. A fine of Rs. 39.81 crore has been imposed on Jet Airways while the penalties on InterGlobe Aviation and SpiceJet are Rs. 9.45 crore and Rs. 5.10 crore, respectively, according to an official release.

InterGlobe Aviation is the parent of no-frills IndiGo. CCI said penalties have been imposed on the airlines for concerted action in fixing and revising fuel surcharge (FSC)—a component of freight charges. The order has come on a complaint filed by Express Industry Council of India against the airlines alleging cartelisation.

According to the regulator, the airlines acted in a concerted manner in fixing and revising the FSC rates in violation of competition norms that prohibit anti-competitive agreements, including cartels. “Considering the financial position of airlines at the relevant time and noting that FSC constitutes about 20-30 per cent of cargo revenue, penalty was imposed by the Commission at the rate of 3 per cent of their average relevant turnover of the last three financial years,” the release said.

The final ruling has been passed pursuant to the directions issued by the erstwhile Competition Appellate Tribunal which had remanded the matter back while setting aside the CCI’s original order, it added.