More trouble for IndiGo? After 5,000 flight cancellations, Competition Commission of India may launch antitrust probe

Fresh trouble for IndiGo? India’s largest airline by market share, IndiGo, may be in for more trouble after a week that saw thousands of its flights being cancelled. India's competition watchdog is considering launching an investigation into IndiGo to determine whether the airline violated competition laws, particularly regarding misuse of its dominant position to limit services or enforce unreasonable terms on travellers, according to a senior government representative quoted in an ET report.

IndiGo, which commands approximately 65% of India's domestic aviation sector, has cancelled over 5,000 flights this month due to an acute shortage of crew members, stemming from its inability to implement new pilot rest regulations. This disruption has affected thousands of passengers at airports nationwide during peak travel period. The airline's operational requirements called for 2,422 captains, but it only had 2,357 available.

More trouble for IndiGo?

The Competition Commission of India (CCI) has ‘strong grounds’ for initiating an investigation, the official was quoted as saying by ET, whilst clarifying that the Directorate General of Civil Aviation (DGCA) remains at the helm of the broader government investigation into the IndiGo situation. The official indicated that the CCI is monitoring the situation closely and will soon decide whether to initiate an inquiry within its jurisdiction.

Section 4 of the Competition Act prohibits a dominant enterprise from misusing its position by enforcing unjust or discriminatory conditions on goods or service transactions; or "limits or restricts" production or services; or subjects consumers to unfair or discriminatory conditions, amongst other provisions.

The Directorate General of Civil Aviation issued a show-cause notice to IndiGo's Chief Executive Officer Pieter Elbers and Chief Operating Officer Isidre Porqueras on Saturday, requesting their response within 24 hours. On Monday, they informed the regulatory authority that determining the precise causes of the network disruption was not feasible within such a brief period, considering the airline's extensive and intricate operations. The executives requested additional time for their response, referencing DGCA regulations that permit a 15-day window to address a show-cause notice.

The antitrust regulator holds the authority to initiate investigations independently or based on complaints received from stakeholders, other parties, or referrals from central or state governments.

When the CCI evaluates a case and identifies preliminary evidence of anti-competitive conduct by an organisation, it instructs its director general to conduct a detailed investigation and provide a report for subsequent action. The matter is closed if no initial evidence is discovered.

Previously, IndiGo faced CCI scrutiny over alleged anti-competitive conduct. However, the antitrust regulator dismissed two cases against the airline - one in 2015 by an individual regarding unfair passenger conditions, and another in 2016 by Air India concerning predatory recruitment practices.

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