CCI imposes Rs 1 cr fine on KFA for not providing facts

Competition watchdog Competition Commission of India (CCI) has imposed a fine of Rs 1 crore on Kingfisher Airlines for not furnishing information it sought during the investigation into the carrier's proposed strategic agreement with another private player Jet Airways.

"Kingfisher Airlines has not furnished certain information that the Director General (Investigations) had asked for while probing the case, so we have imposed a fine of Rs 1 crore on Kingfisher for non-compliance," a senior CCI official said.

When contacted, the airline said it had provided all available information to the CCI and was seeking legal advice on the matter.

"Pursuant to legal advice, the company withdrew the special leave petition filed in the Supreme Court and immediately thereafter and prior to the hearing of the showcause notice, provided all information available with it to the CCI. In spite of this, the CCI imposed the said fine on the company. The company is obtaining legal advice," Kingfisher Airlines said in a statement.

Earlier, the airline had challenged the jurisdiction of CCI to inquire into the strategic agreement with Jet in the Bombay High Court and in the Supreme Court.

The proposed agreement between the two airlines had come under the CCI scanner after a flier filed a complaint saying that if a pact was inked, the two carriers would dominate the market leading to cartel formation.

CCI's Director General (Investigations) has been probing the case to ascertain if indeed the pact would lead to an unfair market.

According to Section 44 (b) of the Competition Act 2002, if any person, being a party to a combination, "omits to state any material particular knowing it to be material, such person shall be liable to a penalty which shall not be less than Rs 50 lakh but which may extend to Rs 1 crore, as may be determined by the Commission".

CCI had begun its probe into the proposed alliance in August 2009, but had to stop it midway when Kingfisher moved the Bombay High Court against the investigation.

The high court passed its judgment 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 platform and cross-utilisation of crew on similar aircraft types are the other key areas of the proposed agreement.