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CCI imposes penalties upon three Airlines for concerted action in fixing and revising fuel surcharge (FSC) on cargo transport

Capital Market 

The (CCI) has imposed penalties upon 3 Airlines for concerted action in fixing and revising Fuel (FSC) - a component of freight charges.

The ​F​inal O​rder was passed by on 08.03.2018 on an information filed by against Jet Airways (India) Ltd., InterGlobe Aviation Limited, Spice Jet Limited, Limited and alleging cartelisation.

The noted in its O​rder that the aforesaid Airlines acted in a concerted manner in fixing and revising the FSC rates and thereby contravened the provisions of Section 3 of the Act which prohibits anti-competitive agreements including cartels.

Accordingly, penalties of Rs. 39.81 crore, Rs. 9.45 crore and Rs. 5.10 crore were imposed upon Jet Airways (India) Ltd., and Spice Jet Limited respectively.

Besides, a cease and desist order was also issued against

While imposing penalties, the Commission applied the principle of relevant turnover and based the penalties on the revenue generated by from only. Considering the financial position of Airlines at the relevant time and noting that FSC constitutes about 20-30% of cargo revenue, penalty was imposed by the Commission @ 3 % of their average relevant turnover of the last three financial years.

The deprecated for using FSC as a pricing tool which was essentially introduced to mitigate the fuel price volatility.

The ​F​inal ​O​rder has been passed by CCI pursuant to the directions issued by the erstwhile remanding the matter back while setting aside the original O​rder of CCI.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, March 08 2018. 16:03 IST