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HindustanTimes Wed,17 Sep 2014

Aviation

Competition panel unsure on airline cartel
PTI
Mumbai, September 20, 2012
First Published: 20:48 IST(20/9/2012)
Last Updated: 20:52 IST(20/9/2012)

The Competition Commission on Thursday said it could take a relook at the issue of cartelisation in the airline industry in terms of hike in airfares but maintained that ticket prices generally moved up due to a mismatch between supply and demand.

“The Commission looked at the airfares some time ago, but we found that the fares had moved up and down more because of the market play dynamics and not because of anti-competitive practices, that they had formed a cartel,” its chairman Ashok Chawla said on the sidelines of an event organised by industry lobby FICCI here. “So, if the need arises, the Commission will look into the issue again.”

Maintaining that the aviation sector was going through a “bit of turmoil”, he said there was a volatility in demand and supply, mainly on account of two large airlines reducing capacity for certain reasons.

He was apparently indicating at cash-strapped Kingfisher and Air India which have reduced capacity for financial problems as well as strikes.

“So when the number of players in a sector goes down, there is always volatility in demand and supply. And that seems to be the main thing happening in the aviation sector,” Chawla.

He also pointed out that the fares move up and down, mainly during the festive seasons or when there was more demand.

“That need not be a competition issue. In fact, it may reflect more robust competition,” the Competition Commission chief said.


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