Probe into air fare hike and cartelization -Governance Now

Probe into air fare hike and cartelization

Competition commission to initiate investigation after MPs sumbit fresh complaint

GN Staff | May 22, 2015

#airlines #fares #Competition Commission #cartelization #IndiGo #Jet #Air India #SpiceJet #GoAir

With few players in the aviation sector there are bound to be charges of cartelization, especially in terms of fares. The Competition Commission of India (CCI) has again taken up the issue of cartelisation and arbitrary hike in fares by commercial airlines.

The mandate of the CCI is to keep a watch on unfair business practices. It goes for investigation only if there is prima-facie evidence of a violation of competition norms.

The CCI has looked into the matter in the past also, but it could not take any action as there was no evidence. However, it decided to begin fresh probe as a group of MPs, led by Bharatiya Janata Party leader Kirit Somaiya, on Thursday lodging a complaint with the CCI against the airlines
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"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," CCI chairman Ashok Chawla has said.

"But whether there is a cartel, we have to get to the bottom of that." The CCI chairman further stated that there is no doubt that the market is getting concentrated. There are 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. We need to watch closely," he said.

Meanwhile, Somaiya has also submitted a complaint against mobile companies alleging that they are indulging in unfair trade practices on issues like net neutrality.

"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 informed. The Mumbai MP has submitted details relating to some companies in the airline and telecom sectors to corroborate his complaints.

Budget airlines to shift to T3 in Delhi

The new budget airlines will be operating from the T3 terminal of the Indira Gandhi International Airport in Delhi. They have been asked to shift to luxury terminal for flying in and out of Delhi due to congestion at the terminal 1D.

AirAsia, which started its operation from Delhi on Thursday, has been allotted space at the T3 terminal. Air Asia India Pvt. Ltd (AAIPL), a joint venture of Tata sons and Malaysian LCC Air Asia becomes the first Indian LCC to operate domestic flights from T3.

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