Indian Carriers to Challenge Price-Fixing Penalties

The Competition Commission of India (CCI), the country's competition watchdog, has imposed penalties on several Indian airlines, which allegedly have been engaged in price-fixing of fuel surcharges (FSC) for cargo shipments. Three of the five carriers, Jet Airways, IndiGo and SpiceJet have meanwhile announced they will go to court to challenge the penalties.

IndiGo is determined to take legal action to challenge the penalties imposed by the Competition Commission of India  -  picture A320, company courtesy.
IndiGo is determined to take legal action to challenge the penalties imposed by the Competition Commission of India - picture A320, company courtesy.

The CCI imposed the penalties last week in response to a case filed by the Express Industry Council of India against Jet Airways, InterGlobe Aviation (parent of Indigo Airlines), SpiceJet, Air India and GoAir for entering into anti-competitive agreements.
"The airlines acted in parallel in collusion in fixing FSC rates. Such conduct was found to have resulted in indirectly determining the rates of air cargo transport and thereby in contravention of the Competition Act," CCI said in a statement.

Detrimental to end consumers
The CCI also noted that such conduct in the air cargo industry undermines economic development of the country and ultimately acts as a detriment to end consumers.
However, the CCI said it had 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.
CCI did not impose any penalty on Air India as "its conduct was not found to be parallel with other airlines," the statement noted. 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, the CCI noted.
The imposed fines on Jet Airways, InterGlobe Aviation and SpiceJet were respectively €21.4 million, €9 million and €6 million and a cease and desist order was also issued against the carriers.

Nol van Fenema

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