'Abuse' of market dominance: CCI seeks info from aviation major IndiGo

Competition Commission has sought details from IndiGo after a consumer complaint alleged exploitative pricing following flight disruptions; CCI may examine Section 4 issues

The Competition Commission of India (CCI) has sought details from IndiGo airline in connection with its ongoing probe based on the information received by the regulator over alleged abuse of dominance by the aviation major, sources said.

 

The CCI inquiry is expected to look into exploitative conduct by the airline that may have led to larger consumer inconvenience because of increased pricing after recent flight disruptions, sources said.

 

Abuse of dominance under Competition Act can lead to exclusionary and exploitative conduct. The inquiry in Indigo matter is likely to focus on the latter, it is learnt.

 

The informant, a consumer, has told the Commission their personal experience with booking of the ticket at 2.5 times the original cost because of flight cancellations. The antitrust watchdog would however, look into the issue from the point of view

 

of larger consumer interest and not just a single customer, sources said.

 

“If the company is limiting the supply and then hiking the prices then this is an issue to be looked into under section 4 of the Competition Act,” the sources said.

 

Section 4 of the Act prohibits abuse of dominant position.

 

The Act does not prohibit dominance itself, but exploiting such a position through unfair or predatory pricing can attract penalties by the Commission.

 

The CCI is unlikely to look into the issues related to Flight Duty Time Limitation (FDTL) which is the domain of Directorate General Civil Aviation.

 

On December 18, the Commission in a short statement had said that it had taken cognisance of information filed against IndiGo in the context of the recent flight disruptions witnessed in the aviation sector, across various routes.

 

The CCI would first conduct a preliminary inquiry based on the information received and then, based on the findings, it would then direct the Director General office to start a formal investigation.

 

IndiGo cancelled over 4,200 flights between December 1 and 9. The crisis was triggered by the airline’s inability to manage its pilot duty roster after the DGCA fully implemented new, stricter rest and duty regulations last month, which increased weekly rest requirements and reduced the hours pilots can fly at night.

 

The disruptions peaked on December 5 before gradually easing.

 

On December 9, the DGCA asked IndiGo to cut 10 per cent of its domestic flights for the entire winter season to help stabilise operations.

 

Before the crisis, the airline operated around 2,300 flights per day -- about 2,000 domestic and 300 international.   

Watchdog clamps down

• CCI will look at the ticket price hikes from the point of view of larger consumer interest
• If the company limits supply and hikes prices, this could be scrutinised under section 4 of the Competition Act
• CCI is unlikely to look into the issues related to flight duty time limitation