[New Delhi] Three Airlines Including Indigo Penalized For Concerted Action in Fixing ATF (FSC) on Cargo Transport
Besides, cease and desist order was also issued against the Airlines.
The Competition Commission of India (CCI) has imposed penalties upon 3 Airlines for concerted action in fixing and revising Fuel Surcharge (FSC) for transporting cargo.
The final order was passed by CCI on 17.11.2015 in a matter which was filed by Express Industry Council of India against
[1]Jet Airways (India) Ltd.,
[2] InterGlobe Aviation Limited,Managing Indigo Airline
[3] Spice Jet Limited,
Apart from these Airlines ,National Carrier Air India Limited and Go Airlines (India) Limited are also found dealing with anti-competitive agreements.
The Commission noted that the Airlines acted in parallel in collusion in fixing FSC rates. Such conduct was found to have resulted in indirectly determining the rates of air cargo transport and thereby in contravention of the provisions of section 3(1) read with section 3(3)(a) of the Act.
Accordingly, penalties of
Rs. 151.69 crores, On Jet Airways (India) Ltd
Rs. 63.74 crores On InterGlobe Aviation Limited For Indigo
Rs. 42.48 crores On Spice Jet Limited
were imposed for the impugned conduct which was found to be in contravention of the provisions of section 3(1) read with section 3(3)(a) of the Act. Besides, cease and desist order was also issued against the Airlines.
No penalty, however, was imposed upon Air India Limited as its conduct was not found to be parallel with other Airlines. Similarly, no penalty was imposed upon Go Airlines (India) Limited as it gave its cargo belly space to third party vendors with no control on any part of commercial/ economic aspects of cargo operations done by vendors including imposition of FSC.
While imposing penalties, the Commission noted that such conduct in the air cargo industry undermines economic development of the country and ultimately acts to the detriment of end-consumers. However, considering the precarious financial position of Airlines, the penalty was imposed by the Commission @ 1% of their average turnover of the last three financial years.