CCI penalises Jet, IndiGo, SpiceJet Rs 540 mn for unfair business practices

The Competition Commission of India (CCI) has imposed a penalty of over Rs 540 million on Jet Airways, SpiceJet and IndiGo for fixing fuel surcharge. The penalty levied on Jet Airways is Rs 398.1 million, IndiGo was fined  Rs 94.5 million and SpiceJet Rs 51 million. The CCI acted on a cartelisation complaint by Express Industry Council of India against Jet, IndiGo, SpiceJet, Air India and GoAir. “Considering the financial position of the airlines and noting that fuel surcharge constitutes 20-30 per cent of cargo revenue, penalty was imposed by the CCI at 3 per cent of their average relevant turnover of the last three financial years,” the CCI said. During hearings with the CCI, the airlines said there was only one instance where four players changed the fuel surcharge at the same time. They also justified the movement in fuel surcharge by linking it with increase in aviation turbine fuel prices. None of the airlines responded till the time the story went to press.

 

 Last time these airlines were penalised by the CCI, the airlines appealed at the Competition Appellate Tribunal (Compat). The Compat had asked the CCI to reinvestigate the case as it felt that the commission had failed to cite reasons for disagreement with DG report and did not give the airlines an effective opportunity to the airline companies to show that they had not formed any cartel for jacking up fuel surcharge from time to time.

In November 2015, the CCI had imposed a penalty of Rs.151.69 crore on Jet Airways, Rs 63.74 crore on IndiGo and Rs 42.48 crore on SpiceJet for cartelization. The fine corresponded to 1% of the annual revenue of the companies. This time, the penalty has been brought down as the commission has considered only the relevant turnover.