CCI levies ~540 million fine on Jet, SpiceJet, IndiGo

The Competition Commission of India (CCI) has imposed a penalty of over ~540 million on Jet Airways, SpiceJet and IndiGo for unfair business practices with respect to fixing fuel surcharge on cargo transport. The penalty levied on Jet Airways is ~398.1 million, IndiGo was fined ~94.5 million and SpiceJet ~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. Passing an order on the same complaint for the second time in nearly three years, the watchdog directed the airlines to "cease and desist" from anti- competitive practices.

During hearings with the CCI, the airlines said that there was only one instance where four players changed the fuel surcharge at the same time. They justified the movement in fuel surcharge by linking it with increase in aviation turbine fuel prices.

Replying to a query, a Jet spokesperson said: “Jet is yet to receive any formal communication from the concerned authorities regarding the development and is therefore unable to comment on the same.”

None of the other airlines responded till the time the story went to press.

The final ruling has been passed pursuant to the directions issued by the erstwhile Competition Appellate Tribunal which had remanded the matter back while setting aside the CCI’s original order. The airlines had moved the Competition Appellate Tribunal (Compat) when they were penalised by the CCI in November 2015.

The Compat had then asked the CCI to reinvestigate the cases as it felt that the commission had failed to cite proper reasons. In November 2015, the CCI had imposed a penalty of ~1.5 billion on Jet, ~637 million on IndiGo and ~424 million on SpiceJet.