The Competition Commission of India may start an investigation into IndiGo to check if the country’s largest airline violated antitrust rules, particularly by misusing its market dominance to limit services or impose unfair conditions on passengers, a senior government official told The Economic Times.
CCI likely to begin probe soon
The official said that there is a strong reason for the antitrust regulator to open a probe. However, the Directorate General of Civil Aviation (DGCA) will still lead the government’s wider investigation into the IndiGo crisis. The CCI is closely monitoring the situation and will soon decide whether to begin an inquiry into matters under its authority.
What happens if CCI finds evidence of anti-competitive behavior?
Under Section 4 of the Competition Act, a company with a dominant position cannot misuse its power by imposing unfair or unequal conditions on buying or selling goods and services, limiting production or services, or treating consumers unfairly, among other practices.
The law allows the CCI, to start an inquiry on its own, after receiving complaints from stakeholders, or based on references from the central or state governments.
If the CCI finds initial evidence of anti-competitive behavior, it asks its Director General to conduct a full investigation and submit a report for further action. If no initial evidence is found, the case is closed.
IndiGo has been examined by the CCI in the past for alleged anti-competitive practices. Two earlier cases, one filed by an individual over unfair passenger conditions and another by Air India regarding predatory hiring practices, were dismissed in 2015 and 2016.
IndiGo’s market dominance and the chaos that ensued
IndiGo, which holds around 65% of India’s domestic aviation market, has cancelled over 5,000 flights this month due to a serious shortage of pilots after failing to follow new rest rules, the ET report said. This left thousands of passengers stranded at airports during the busy travel season. The airline needed 2,422 captains but had only 2,357 available.
The DGCA on Saturday had issued a show-cause notice to IndiGo CEO Pieter Elbers and COO Isidre Porqueras, asking them to respond within 24 hours. On Monday, both executives told the regulator that it was too early to identify the exact reasons for the network collapse because of the airline’s large and complex operations. They requested more time, noting that DGCA rules allow 15 days to reply to such notices.
The ET report said that the CCI did not respond to emails seeking comment on the matter.