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AI strike: private airlines face probe

Did domestic airlines make a killing by unfairly raising fares to exploit a sudden spike in demand during the 10-day strike by Air India pilots that ended last week? HT reports. Playing field

india Updated: May 13, 2011 02:14 IST
HT Correspondent

Did domestic airlines make a killing by unfairly raising fares to exploit a sudden spike in demand during the 10-day strike by Air India pilots that ended last week?

The Competition Commission of India (CCI), India’s antitrust body mandated to rule on cases of caterlisation, abuse of dominance and monopolistic practices, has summoned airline representatives and civil aviation ministry officials on Friday to examine charges of “suspected cartelisation” in the airline industry.

A preliminary probe has found that the private carriers who resorted to opportunistic pricing denied customers an “informed” choice.

Pilots of the former Indian Airlines went on strike between April 27 and May 6 demanding pay parity with their former Air India counterparts – now merged in a single Air India identity — disrupting air

Services that led to a drastic shrinkage of availability of seats.

A price hike followed, and private airlines also gained from a shift in demand to them away from the strike-hit carrier.

When contacted Dhanendra Kumar, chairman CCI refused to comment. “It is a pending case and I would not like to comment anything on the issue,” he said.

Government sources said that there could have been an abuse of dominance and the regulator could come down heavily on the airlines in case the CCI’s final report shows evidences of cartelisation.http://www.hindustantimes.com/images/HTPopups/130511/13_05_biz1.jpg

“The CCI had called private airlines on May 13 to pass an interim order. The interim order asked private airlines to immediately stop opportunistic pricing of tickets,” a source said.

The government had written to the CCI asking whether an investigation can be carried out on possible cartelisation by private air carriers during the Air India pilots’ strike.