Competition commission orders inquiry into air fare increase by airlines

Taking suo moto action, competition watchdog, Competition Commission of India (CCI) today asked its investigation wing to inquire into the possible cartel-like behaviour in fare rise by airlines.

"The director general-investigation has been given 60 days time to complete the probe into fare hike by airlines," an official of the CCI told Press Trust of India.

The commission has also asked the civil aviation ministry to share information about the fare hike by airlines with the watchdog, sources said, adding that investigations would be conducted under Section 26 of the CCI Act.

The Section 26 empowers the commission to order an inquiry by the director general into a matter if it feels that a primefacie case exists for violation of the Competition Law.

The suo moto action by the commission, sources said, follows media reports and the statements issued by civil aviation minister Praful Patel on steep hike in fares announced by airlines in non-peak season last month.

The overall airfare levels, particularly the spot or last-minute fares, had shot up several folds even when the demand for air travel was not high.

The fares, however, came down by 20 to 25% after the Directorate General of Civil Aviation (DGCA) and the ministry warned the airlines of severe action under the Aircraft Rules.

Earlier, the Civil Aviation Economic Advisory Council (CAEAC) had set up a working group to suggest measures to protect consumer interests, including ensuring transparency in airfares.

The group, which would submit its initial report by December 30, would examine the existing system of passenger fare structuring by all scheduled domestic airlines and the manner in which the passenger fares are disclosed to the travelling public.

Last year too, the competition regulator had sent notices to airlines whether they were acting together to raise or lower airfares. The airlines had then replied in the negative.