CCI orders antitrust probe into IndiGo over flight cancellations, fare surge

IndiGo said on Thursday that it is reviewing the order from India’s antitrust regulator and will make appropriate recourse upon reviewing it in detail.  

The Competition Commission of India (CCI), the country’s competition watchdog, has ordered an antitrust investigation into the airline services for alleged abuse of dominant position following large-scale flight cancellations and sharp fare increases in December.

  The airline told DGCA in December that the disruption was due to minor technical glitches, winter schedule changes, bad weather, increased congestion and the rollout of flight duty time limitations (FDTL) Phase II norms.    

After the sudden decline in the number of flights operating in India, IndiGo cancelled about 4,500 flights in the first week of December. It stranded over thousands of passengers nationwide highlighting concerns over limited competition in the world’s fastest-growing aviation market.

In a 16-page order dated 4 February, the CCI has directed the Director General (DG), the watchdog’s investigative arm, to examine whether IndiGo violated provisions of the Competition Act by cancelling thousands of flights across its network and subsequently charging significantly higher fares to stranded passengers.

“By cancelling thousands of flights constituting a significant portion of the scheduled capacity, IndiGo effectively withheld its service from the market, creating an artificial scarcity, limiting consumer access to air travel during peak demand,” the CCI said.

Shares of the airline were little changed after its response were last trading 1.5 per cent lower.