Penalty on airline trio

New Delhi: The Competition Commission of India (CCI) on Wednesday slapped a total penalty of more than Rs 54 crore on three airlines - Jet Airways, InterGlobe Aviation and SpiceJet - for unfair business practices with respect to fixing fuel surcharge on cargo transport.

Passing an order on the same complaint for the second time in nearly three years, the watchdog has directed the airlines to "cease and desist" from anti-competitive practices.

A fine of Rs 39.81 crore has been imposed on Jet Airways while the penalties on InterGlobe Aviation and SpiceJet are Rs 9.45 crore and Rs 5.10 crore, respectively, according to the CCI.

InterGlobe Aviation is the parent of no-frills carrier IndiGo. There were no immediate comments from the three airlines.

The penalties translate to 3 per cent of the respective airline's average turnover earned from the levy of FSC (fuel surcharge) on the volume of cargo handled for the three-year period - 2010-11, 2011-12 and 2012-13.

The CCI said penalties had been imposed on the airlines for "concerted action in fixing and revising FSC - a component of freight charges".

However, the latest quantum of penalties is much lower than what was imposed in 2015 by the regulator on these carriers.

The total penalty then was over Rs 257 crore, with Jet fined an amount of Rs 151.69 crore, InterGlobe Aviation Rs 63.74 crore and SpiceJet Rs 42.48 crore.

Following appeals, the November 2015 order was set aside by the erstwhile Competition Appellate Tribunal in April 2016 and the matter was sent back to the CCI.

In its 42-page order on Wednesday, the regulator noted the basic concern is the overcharging of cargo freight in the garb of fuel surcharge by the air cargo transport operators which adversely affect consumers beside stifling economic development of the country.

"It is important for the growth of the market that these cartels be broken and more transparency be brought in price fixing by the airlines by taking firm steps.

"Else, the fuel surcharge, which was essentially introduced to mitigate the fuel price volatility, will continue to be used as a pricing tool to the detriment of the users...," it said.

The order has been passed on a complaint by the Express Industry Council of India against the airlines alleging cartelisation. PTI


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