India's antitrust regulator, the Competition Commission of India (CCI), may launch an inquiry against the country's largest airline, IndiGo, to determine any violation of antitrust rules, particularly those related to the abuse of market dominance to restrict services or impose unfair conditions on passengers, according to a report by The Economic Times, citing a senior government official.
There is a "strong case" for the agency to initiate a probe, the official told ET, while highlighting that the aviation regulator, the Directorate General of Civil Aviation (DGCA), will continue to lead the government's inquiry into the IndiGo crisis.
The CCI is closely monitoring the matter and will soon take a final decision on whether to initiate an inquiry, the official told the news portal.
IndiGo meltdown
Indigo, a major player in India's aviation sector, has cancelled over 5,000 flights this month due to a significant crew shortage caused by its inability to implement new regulations for pilots.
The flight cancellations stranded thousands of passengers at airports across the country during the peak travel season. Although the airline needed 2,422 pilots, it only had 2,357.
DGCA's action
On Saturday, the DGCA issued a show-cause notice to IndiGo's CEO, Pieter Elbers, and COO, Isidore Porqueras, giving them 24 hours to respond. However, they notified the aviation regulator on Monday that pinpointing the exact causes of the network collapse would take longer because of the airline's extensive and complex operations. They requested additional time to reply, citing DGCA regulations that permit a 15-day response period, according to the report.
Section 4 of the Competition Act prohibits a dominant enterprise from abusing its position, such as by imposing unfair or discriminatory conditions on the purchase or sale of goods or services, limiting or restricting production or services, or applying unfair or discriminatory conditions to consumers, among other restrictions.
The law authorises the antitrust regulator to commence an inquiry either independently or upon receiving a complaint, information from stakeholders or others, or a referral from the Centre or state governments.
After review, if the CCI detects a prima facie case of anti-competitive practices by a company, it instructs its Director General to initiate a formal investigation and submit a report for further action. If no prima facie evidence is found, the matter is closed, the report noted.
Notably, this is not the first time that IndiGo has come under the CCI lens for anti-competitive behaviour. However, in 2015 and 2016, the antitrust regulator dismissed two cases: one filed by an individual regarding unfair conditions imposed on passengers, and another by Air India concerning predatory recruitment practices, it added.