Penalized airlines likely to challenge CCI order


New Delhi: All three airlines, penalized by the fair business practices regulator on Tuesday, said they were considering to challenge the order that found them indulging in anti-competitive agreements.

The development comes after the Competition Commission of India (CCI) penalized Jet Airways, InterGlobe Aviation which is the mother company of low cost carrier (LCC) IndiGo, and SpiceJet for indulging in anti-competitive practices.

All three airlines were fined a total of Rs.258 crore for acting in a concerted manner to fix and revise fuel surcharge (FSC) prices for transporting cargo.

Budget passenger carrier SpiceJet said that it was considering to challenge the order.

“We are currently studying the order. We are likely to challenge the order,” a company spokesperson told IANS.

A penalty of Rs.42.48 crore was imposed on SpiceJet.

LCC IndiGo was quoted in a statement that the company is studying the CCI order and will take legal steps to challenge it in the appropriate forum.

“The company has been legally advised that it is not in contravention of the provisions of the Competition Act, 2002,” the IndiGo statement said.

The order penalized InterGlobe Aviation with a fine of Rs.63.74 crore.

A Jet Airways spokesperson said: aceJet Airways is not in contravention of the provisions of the competition act and shall pursue all available legal steps to defend its position.

Jet Airways was fined Rs.151.69 crore in the matter.

On Tuesday, the fair practices regulator, imposed penalty on all three airlines in response to a case filed by the Express Industry Council of India against Jet Airways, InterGlobe Aviation, SpiceJet, Air India, and GoAir for entering into anti-competitive agreements.

“Commission noted that the airlines acted in collusion in fixing FSC rates. Such conduct was found to have resulted in indirectly determining the rates of air cargo transport,” the CCI was quoted in a statement.

Accordingly, the CCI imposed penalties amounting to Rs.151.69 crore, Rs.63.74 crore and Rs.42.48 crore on Jet Airways, InterGlobe Aviation and SpiceJet, respectively.

“No penalty, however, was imposed upon Air India, as its conduct was not found to be parallel with other airlines,” the statement said.

“Similarly, no penalty was imposed upon Go Airlines, as it gave its cargo belly space to third party vendors with no control on any part of commercial aspects of cargo operations done by vendors including imposition of FSC.”

Furthermore, the CCI noted that such conduct in the air cargo industry undermines economic development of the country and ultimately acts as a detriment to end consumers.

In addition, the CCI said it imposed modest penalties on the airlines, considering their weak economic position.

“Considering the precarious financial position of airlines, the penalty was imposed by the commission at the rate of one percent of their average turnover of the last three financial years,” the statement added.