Companies

Airlines to contest Rs 258 crore CCI fine

| | Updated on: Nov 18, 2015
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BL19_02_AIRWAYS

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BL10_01_NEWINDI

Jet Airways, SpiceJet, IndiGo charged with colluding to fix fuel prices

Jet Airways, IndiGo and SpiceJet will contest penalties totalling ₹258 crore slapped on them by the CCI for anti-competitive practices related to air cargo.

The Competition Commission of India on Tuesday said Jet Airways (India) Ltd, InterGlobe Aviation Ltd (IndiGo Airline’s parent company), SpiceJet Ltd, Air India Ltd and Go Airlines (India) Ltd had colluded in fixing the fuel surcharge rates.

In volatile trade, the Jet Airways stock closed about 3 per cent lower at ₹416 on the BSE on Wednesday.

The InterGlobe Aviation stock was marginally up at ₹1044.40, after rising about 1 per cent. SpiceJet, however, closed 9.5 per cent up at ₹52.55.

“Jet Airways believes that it is not in contravention of the provisions of the Competition Act and it shall pursue all available legal steps to defend its position,” the carrier said in a regulatory filing.

A penalty of ₹151.69 crore was imposed on Jet Airways, while that on InterGlobe Aviation and SpiceJet are ₹63.74 crore and ₹42.48 crore, respectively.

No fines were imposed on GoAir and Air India.

“While the investigations carried out by the Joint Director General, CCI, concluded that the allegations levelled against the airlines were not proved, the Commission, pursuant to the objections filed by EICI, has held otherwise and imposed a penalty on the company and two other airlines,” Kuldeep Sharma, Company Secretary and Vice-President Corporate Governance and Compliance at Jet Airways, said in a statement.

The CCI’s ruling came on a complaint filed by Express Industry Council of India (EICI), an apex body of express transportation companies, alleging collusion in levy of fuel surcharge on transport of cargo against five airlines.

In a separate filing with the Bombay Stock Exchange, InterGlobe Aviation said it is studying the CCI order and will take legal steps to challenge it in the appropriate forum.

“The company has been legally advised that it is not in contravention of the provisions of the Competition Act, 2002,” it said.

Echoing IndiGo’s statement, SpiceJet in its statement to the BSE said, “We would like to clarify that the investigation conducted by the DG in the matter concluded that the airlines did not indulge in anti-competitive activities. The company is examining the order and shall be taking such steps, including challenging the order in appropriate forum as may be advised and deemed necessary to defend the company's position.”

Air India was not fined as the CCI probe said: “Air India’s conduct was not found to be parallel with other airlines.”

On the other hand, GoAir was exempted from the penalty saying, “No penalty was imposed on Go Airlines 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,” CCI said in its order.

Published on January 22, 2018

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