Monday, April 18, 2016

Tribunal sets aside Rs258 crore airline fine

 In a major relief to Jet Airways, SpiceJet and IndiGo, the Competition Appellate Tribunal on Monday set aside a fine of Rs 258 crore imposed on them last December on charges of cartelization and "overcharging cargo freight in the garb of fuel surcharge". 
Hearing the airlines' appeal against that order of the Competition Commission of India (CCI), justice G S Singhvi said, "The appeals have been allowed." The case has been referred back to CCI for probing suspected cartelization by airlines in fixing fuel surcharges.

The CCI order had come on a complaint filed by Express Industry Council of India, which had also named Air India and GoAir, apart from the three airlines. The fair trade regulator did not find Air India and GoAir guilty.
"The basic concern in the present case is the overcharging of cargo freight, in the garb of fuel surcharge, by the air cargo transport operators, which adversely affect consumers. Such cartels in the air cargo industry particularly undermine economic development in a developing country," the CCI order had said. It had added that the fuel surcharge "will continue to be used as a pricing tool to the detriment of the users.... and thereby will also harm the competition."

CCI had asked Jet, IndiGo and SpiceJet to pay Rs 151.7 crore, Rs 63.7 crore and Rs 42.5 crore, respectively, within 60 days. No penalty was imposed on AI as its conduct was found above board. Similarly, no penalty was imposed upon GoAir 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 fuel surcharge.

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