Fair trade regulator Competition Commission of India (CCI) has imposed a penalty of Rs 258 crore on Jet Airways, IndiGo and SpiceJet for indulging in anti-competitive practices while fixing fuel surcharge (FSC).
Of this amount, Rs 151.69 crore was imposed on Jet Airways, Rs 63.74 crore on InterGlobe Aviation, which operates IndiGo, and Rs 42.48 crore on SpiceJet.
However, the CCI did not impose any penalty on Air India and Go Airlines, which were also named in a complaint filed by the Express Industry Council of India (EICI), an apex body of express companies.
The regulator said the penalty was not imposed on Air India “as its conduct was not found to be parallel with other airlines.”
Go Airlines, which was also named in a complaint, was spared as it gave its cargo belly space to third-party vendors.
According to a statement issued by the CCI, the commission while imposing penalties noted that such conduct in the air cargo industry undermines economic development of the country and ultimately acts to the detriment of end consumers.
“We had filed a complaint before the CCI against cartelisation of airlines by using fuel surcharge as a tool,” said Vijay Kumar, COO, EICI.
“What had happened was when oil prices were very volatile, the airlines had introduced fuel surcharge, which by itself was not an issue. The issue is when you use that fuel surcharge as a tool for ensuring that the prices go up in tandem. When the fuel rates were going down, even then the fuel surcharges were going up,” said Kumar, adding that it was clear that the airlines were using fuel surcharge as a tool to rig the market.
A SpiceJet spokesperson said that the company was likely to challenge the order.
“Jet is not in contravention of the provisions of the Competition Act and shall pursue all available legal steps to defend it’s position,” a Jet spokesperson said.