Indigo's troubles continue, it may have to face this investigation
IndiGo, which has a market share of about 65% 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, leaving thousands of passengers stranded at airports across the country during the peak travel season.
Troubles continue to mount for IndiGo, the country's largest low-cost airline. Now, IndiGo is facing the threat of another antitrust investigation.
A senior government official told media reports that India's antitrust regulator may launch an investigation into IndiGo to determine whether the country's largest airline has violated antitrust rules.
The official said in an ET report that there is a "strong basis" for the Competition Commission of India (CCI) to initiate an investigation, though he stressed that the Directorate General of Civil Aviation (DGCA) will continue to lead the government's comprehensive probe 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 into the issues falling within its jurisdiction.
IndiGo, which has a nearly 65% share of 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, leaving thousands of passengers stranded at airports across the country during the peak travel season. While the airline needs 2,422 captains, it only has 2,357.
reply to show cause notice
On Saturday, the Directorate General of Civil Aviation (DGCA) issued show-cause notices to IndiGo CEO Peter Elbers and COO Isidre Porqueras, ordering them to respond within 24 hours.
However, on Monday, the two told the aviation regulator that due to the airline's large and complex operations, it was not possible to determine the exact causes of the network outage so quickly. The officials sought more time to respond, citing DGCA rules that provide 15 days to respond to a show-cause notice.
On what occasions does the investigation begin?
While there has been no official statement from the CCI, Section 4 of the Competition Act prohibits a dominant entity from abusing its position by imposing unfair or discriminatory conditions on the purchase or sale of goods or services; or “limiting or restricting” the production or services; or imposing unfair or discriminatory conditions on consumers, etc.
The law empowers the competition regulator to initiate investigations on its own or after receiving complaints or information from stakeholders or others, or after receiving references from the central or state governments.
This is how CCI action begins
After investigating a 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 a report for further action.
If it finds no prima facie cause, it closes the case. IndiGo has previously come under CCI scrutiny for alleged anti-competitive behavior.
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.