CCI imposes Rs 258 cr fine on Jet Airways, IndiGo, SpiceJet

The Competition Commission of India (CCI) has slapped penalties worth Rs 258 crore on three leading airlines- Jet Airways, IndiGo and SpiceJet for cartelisation in fixing cargo fuel surcharge.
In this regard, it also issued a cease and desist order against these three airlines on the complaint filed by Express Industry Council of India (EICI). In its complaint EICI also had named Air India and GoAir apart from the three airlines.
In its order, the CCI noted that

• These 3 airlines acted in collusion to fix fuel surcharge rates which resulted in indirectly determining the rates of air cargo transport.
• Imposed penalties are: 152 crores rupees upon Jet Airways, 64 crores rupees upon IndiGo and 42 crores rupees upon Spice Jet.
• The conduct of these airlines was contravention of the anti-competitive agreements in the air cargo industry and it undermined economic development of the country and ultimately affected the end consumers.
• Fuel surcharge was essentially introduced to mitigate the fuel price volatility. But cartelisation of it by these leading airliners has harmed the fair competition in the market.

CCI however has imposed no penalty upon Air India and Go Airlines as they were not found violating competitive norms. It has asked Jet Airways, IndiGo and SpiceJet to immediately stop indulging in such anti-competitive practices.

About Competition Commission of India

• The CCI was established to eliminate practices that adversely affect competition in different industries and protect interests of consumers and ensure freedom of trade.
• Its predecessor was the MRTPC (Monopolies and Restrictive Trade Practices Commission) which was functional prior to 1991 Economic Reforms.
• The CCI acts as a quasi-judicial body which gives opinions to statutory authorities and also deals with other cases.
• It is statutory body established under The Competition Act of 2002. It was established in 2003 and became fully functional in 2009.

Month: Current Affairs - November, 2015