Under scanner

New Delhi, Feb. 5: The Monopolies and Restrictive Trade Practices Commission will probe into a possible price cartel by low-cost airlines. The investigative wing of the commission will conduct the probe.

Under the scanner are not only low-cost airlines but also the Federation of Indian Airlines, which represents the interests of aviation companies.

Last month, after a meeting with its members, the federation had fixed Rs 500 as the minimum fare to improve the bottomlines of aviation companies, MRTPC officials said.

The commission suspects the airlines of using the platform of the federation to eliminate competition and deprive travellers of low-cost promotional fares.

“It appears to be restrictive trade practices and goes against the interest of consumers,” the officials said.

Low-cost airlines denied the allegation. A spokesperson for SpiceJet said, “We have our own pricing mechanism and we do not discuss our strategy with competitors.”

According to the officials, the commission is of the view that after the price arrangement, promotional fares offered by the no-frills airlines such as Deccan, SpiceJet, GoAir and Indigo have vanished.

They said agreements such as the one reached among the low-cost airlines violate Section 33(1)(d) and Section 33(1)(j) of the MRTP act.

Section 33(1)(d) says any pact to offer services only at minimum agreed prices among service providers will amount to a cartel.

Section 33(1)(j) says such an agreement eliminates competition and, hence, results in the formation of a cartel.

Last year, too, the commission had probed six airlines who were alleged to have refused refunds against cancellations.