There is no sign of any end to the troubles for Indigo, the country’s largest low cost airline. Now the threat of another investigation is looming on Indigo. Which is related to anti trust. A senior government official told a media report that India’s antitrust regulator may initiate an investigation against IndiGo to find out whether the country’s largest airline has violated antitrust rules.
The official said in the ET report that there are “strong grounds” for the Competition Commission of India (CCI) to launch a probe, though he stressed that the Directorate General of Civil Aviation (DGCA) will continue to lead the government-wide investigation into the IndiGo crisis. The official said the CCI is closely monitoring the matter and will soon take a final decision on whether to initiate an investigation on issues falling within its jurisdiction.
IndiGo, which has about 65 per cent share in the domestic aviation market, has canceled more than 5,000 flights so far this month. Failure to implement new rest rules for pilots has led to a severe staff shortage. Due to this, thousands of passengers were left stranded at airports across the country during the busy travel season. While the airline required 2,422 captains, it had only 2,357.
Reply to show cause notice
On Saturday, DGCA issued a show cause notice to IndiGo CEO Peter Elbers and COO Isidre Porqueras and ordered them to reply within 24 hours. However, both told the aviation regulator on Monday that due to the airline’s large and complex operations, it was not possible to determine the exact reasons for the network outage so quickly. The officials sought more time to respond citing DGCA rules, under which 15 days are given to respond to the show cause notice.
On what occasions does the investigation begin?
However, no official statement has come from CCI. Section 4 of the Competition Act prohibits a dominant enterprise from abusing its position if it imposes unfair or discriminatory conditions on the purchase or sale of goods or services; or “limits or restricts” production or services; or imposes unfair or discriminatory conditions on consumers, etc. The law empowers the competition regulator to initiate an investigation on its own or after receiving complaints or information from stakeholders or others, or after receiving a reference from the central or state governments.
This is how CCI action starts
After investigating the case, if the CCI finds a prima facie case of anti-competitive behavior by a company, it directs its Director General to initiate a formal investigation and submit his report for further action. If he does not find any prima facie reason, he closes the case. IndiGo has already come under CCI investigation for alleged anti-competitive behaviour. However, two cases against the airline – one filed by an individual (primarily for imposing unfair conditions on passengers) and the other by Air India (for predatory recruitment practices) – were dismissed by the antitrust regulator in 2015 and 2016 respectively.