CCI finds no competition issue in Jet-Kingfisher alliance

The Competition Commission of India (CCI) has found no competition issue in the 2008 strategic alliance between private carriers Jet Airways and Kingfisher Airlines and ordered closure of the issue.

CCI, had ordered a probe into the alliance in 2009. It has said in its order that “no violation of either Section 3 or Section 4 was found against Jet Airways and Kingfisher Airlines and the matter deserves to be closed”. Sections 3 and 4 of the Competition Act 2002 pertain to anti-competitive agreements and abuse of dominant position, respectively.

The CCI had ordered the probe on the basis of a complaint from a frequent flier that if such an agreement was inked then the two airlines would dominate the market leading to cartel formation. The then proposed alliance could result in an abuse of dominance as the two would control market share of close to 60 per cent.

The CCI noted that such kind of agreements have not only been entered between Jet and Kingfisher but they also have similar separate arrangements with a large number of other domestic as well as international airlines and most of these have been entered with Air India.

Soon after the Director General (Investigations) of CCI began the probe, Kingfisher had challenged the jurisdiction of CCI to inquire into the strategic agreement with Jet in the Bombay High Court and the Supreme Court. However, both courts had passed their judgement in favour of CCI after which the probe resumed.

The scope of the strategic alliance between Jet and Kingfisher, announced in October 2008, includes code-sharing on both domestic and international flights and joint fuel management with a view to reducing expenses. Besides, common ground-handling, cross-selling of flight inventories using a common global distribution system and cross-utilisation of crew on similar aircraft types were the other key areas of the proposed agreement.