The Competition Appellate Tribunal has said there is no evidence of cartelisation among foreign airlines operating on international routes from India in their decision to stop paying commissions to travel agents.

Hearing an appeal by the Travel Agents Association of India (TAAI) against an order by the Competition Commission of India (CCI) in the matter, the tribunal ruled that “there was no evidence of any cartelisation whatsoever”.

In its order passed on December 7, the COMPAT also upheld the CCI decision that these airlines cannot be viewed “as a group or enterprise” and none of the carriers was individually dominant in their market.

In their appeal, TAAI had claimed that nine international airlines — Lufthansa, Air Canada, Austrian Airlines, Air France, Continental Airlines, NorthWest Airlines, KLM Royal Dutch Airlines, Swiss International and Singapore Airlines — used to pay commission of up to 5 per cent on sale of tickets to the travel agents.

The agents had complained to the CCI that these airlines discontinued the commission payment after they “formed a cartel and were also abusing the dominant position.

It had further alleged that airlines were intentionally not enforcing the transaction fee system which was a model introduced by them in lieu of prevailing commission system.

However, the fair trade regulator CCI had rejected TAAI’s allegations of abuse of dominant position by these nine airlines in the international flying market and ruled that there was no evidence of cartelisation among these carriers.

TAAI, a lobby group of agents, had accused that these airlines had monopolised the market and were imposing “discriminatory and unfair” conditions on ticket sales.

Dismissing TAAI’s plea, COMPAT has upheld CCI’s position that all the foreign airlines could not be viewed as a single group or enterprise and said “none of these airlines was individual dominant in the market”.

“CCI is right in holding that the relevant market for the respondents (airlines) was the international routes reaching from and to India from the foreign destination and not a particular route being operated by a particular airlines,” said a COMPAT Bench headed by Chairman Justice V.S. Sirpurkar.

Presenting their cases, the airlines said they had taken their decisions with regard to the commission payments independently and rejected the charges of any cartelisation.

Among others, Singapore Airlines asserted that its decision to implement zero per cent commission was an independent decision based on the recommendations and policy of its head office.

Its counsel Naval Chopra submitted before the Tribunal that there was no agreement between the airlines and the agents.

(This article was published on December 9, 2012)
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