CCI has noticed that passengers had been “left with no actual alternative however to just accept last-minute cancellations” and had been compelled to hunt options “at considerably larger costs”. Given IndiGo’s dominant place, shoppers had been “successfully locked in and lacked viable options.”
In a 16-page order dated 4 February, the CCI has directed the Director Normal (DG), the watchdog’s investigative arm, to look at whether or not IndiGo violated provisions of the Competitors Act by cancelling hundreds of flights throughout its community and subsequently charging considerably larger fares to stranded passengers.
This marks the start of the investigation.
“….the CCI directs the DG to trigger an investigation to be made into the matter and submit an investigation report inside a interval of 90 days from the date of receipt of this order,” the order by CCI chairperson, Ravneet Kaur and three members, Anil Agarwal, Sweta Kakkad and Deepak Anurag, learn.
The anti-trust company additional mentioned IndiGo created an ‘synthetic shortage’.
Queries despatched to the airline weren’t answered until print time. IndiGo has acquired the order.
It held that by cancelling hundreds of flights that constituted a good portion of the scheduled capability, “IndiGo successfully withheld its service from the market, creating a synthetic shortage, limiting shopper entry to air journey throughout peak demand. Such conduct by a dominant enterprise could also be considered as limiting the availability of companies beneath Part 4(2)(b)(i) of the Act (regarding abuse of dominant place).”
Dominant place
“The aforesaid conduct of the OP (IndiGo) appears to be prima facie inflicting an considerable opposed impact on competitors in India. Thus, the Fee is of the opinion {that a} prima facie case of contravention of the provisions of Sections 4(2)(a)(i) and 4(2)(b)(i) of the Act by the OP (IndiGo) is made out within the current matter,” it additionally noticed in its order.
Part 4 of the Competitors Act 2002 offers with abuse of dominant place.
For context, IndiGo suffered an operational meltdown within the first week of December, cancelling over 4,500 flights and leaving hundreds of passengers stranded at airports throughout India. The airline instructed DGCA in December that the disruption was because of minor technical glitches, winter schedule modifications, unhealthy climate, elevated congestion and the rollout of flight responsibility time limitations (FDTL) Section II norms.
The revised guidelines mandate stricter night-flying limits and longer pilot relaxation intervals, thereby elevating crew necessities.
Nonetheless, in its 17 January probe, DGCA investigation discovered that over-optimised operations and insufficient regulatory preparedness led to the disruptions. It additionally flagged deficiencies in system software program help.
The regulator mentioned the airline did not plan ample buffers and to correctly implement FDTL norms, leading to widespread delays and cancellations.
One such aggrieved passenger, Kartikeya Rawal, moved the CCI, claiming that his return flight on IndiGo was cancelled simply hours earlier than departure, with none various preparations, forcing him to rebook with the identical airline at a a lot larger value. The informant had initially paid ₹7,173 for his return ticket however finally travelled two days later at a fare of ₹17,000.
CCI famous that this was not an remoted incident. “The problem has additionally been broadly reported within the public area,” the regulator noticed in its order, including that passengers throughout the nation had been left stranded. Between 3 and 5 December, there have been 2,507 flights, of which 1,852 had been delayed, affecting greater than three lakh passengers, it was famous.
Energy over the market
“The hurt is not confined to this route versus that route; fairly, the conduct constrains the general capability of shoppers to make use of home air journey as a mode of transport,” it mentioned.
Declaring to IndiGo’s dominance, the Fee relied on knowledge submitted by the Directorate Normal of Civil Aviation (DGCA), the nation’s aviation regulator. CCI noticed that the information confirmed that IndiGo accounted for round 60–61% of home passenger volumes and capability previously two monetary years. In FY25, IndiGo carried over 104 million passengers.
The CCI additionally famous IndiGo’s intensive community. Out of roughly 835 home city-pair routes, IndiGo operated on 643, and was the only real operator on greater than 330 routes in latest months, it was noticed. “Such structural presence on a lot of monopoly routes constitutes a related indicator of market energy,” CCI mentioned.
As well as, the Fee famous that IndiGo operates the biggest fleet in India, with over 400 plane, and is the one main airline reporting sustained income whereas most rivals stay loss-making.
“On the idea of considerable and sustained market share, extensive community attain with unique operations on a major variety of city-pair routes, comparatively bigger fleet and powerful monetary efficiency, the Fee is of the prima facie view that (IndiGo) enjoys a place of dominance,” the order mentioned.
It additionally famous that IndiGo “is a major market participant not solely when it comes to absolute passenger numbers carried, but additionally when it comes to Out there Seat Kilometres (ASKM) passenger capability, reflecting its substantial scale of operations and capability deployment within the home aviation market.”
DGCA’s commentary
IndiGo constantly accounts for about 60–61% of complete home ASKM, reflecting not solely passenger volumes but additionally efficient management over market capability and supply-side situations, CCI mentioned. “The home passenger aviation market displays very excessive and growing focus, exhibiting that main corporations possess the flexibility to function independently of aggressive forces, because the presence of efficient rivals is materially constrained,” the anti-trust company mentioned.
Whereas ordering the probe, the Fee clarified that its findings had been preliminary. “Nothing said on this order shall be tantamount to a remaining expression of opinion on the deserves of the case,” it mentioned.
Considerably, DGCA itself knowledgeable the Fee that it doesn’t possess financial regulatory powers over airfares. In its submission, the aviation regulator said that “airfares are usually not regulated by DGCA” and that it has not been vested with powers to conduct competitors evaluation, akin to market definition, dominance evaluation, or examination of coordinated conduct.
“By rejecting the argument that DGCA’s oversight beneath the brand new Bhartiya Vayuyan Adhiniyam (BVA), 2024 precludes antitrust scrutiny, the Fee has asserted its mandate over financial conduct within the skies,” mentioned Rohit Jain, managing associate at Singhania & Co., a authorized advisory agency.
“The discovering that IndiGo, holding over 60% market share, is prima facie dominant and should have abused this place via synthetic shortage and unfair pricing, locations its operational methods beneath intense authorized lens. The order units a vital precedent that the aviation sector shouldn’t be proof against antitrust scrutiny, even with the brand new BVA 2024 in place, and it additionally holds that any airline can’t rely solely on DGCA compliance to keep away from competitors legal responsibility,” he added.
One other lawyer mentioned this can be a massive win for the passengers affected by flight cancellations.
“CCI’s order is a well timed reminder that market management comes with heightened duty. Competitors regulation doesn’t selectively penalize success, nevertheless it does require dominant gamers to function inside clear authorized boundaries to protect truthful alternative available in the market. An enormous win for the passengers affected by the disrupted flight companies,” mentioned Bharat Kumar, affiliate associate at Saikrishna & Associates.
Based on Anish E. Raveendran, Advocate on the Bombay Excessive Court docket, it’s evident that the Fee has discovered enough prima facie materials to conclude that IndiGo, a dominant enterprise within the related market with 60% market share in home air passenger companies, could have contravened sections of the Competitors Act.
“The path for an in depth investigation considerably elevates the airline’s authorized publicity from regulatory non-compliance to potential antitrust legal responsibility. The matter additionally carries precedential significance for the aviation sector, significantly in relation to obligations of dominant market individuals in periods of peak demand,” mentioned Raveendran.