CCI revives probe of Jet-Kingfisher deal

CCI revives probe of Jet-Kingfisher deal
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First Published: Wed, Jun 09 2010. 09 02 AM IST
Updated: Wed, Jun 09 2010. 09 02 AM IST
New Delhi: India’s competition watchdog has revived an investigation that seeks to examine whether the strategic alliance struck between Kingfisher Airlines Ltd and Jet Airways (India) Ltd in 2008 is a case of cartelization.
The Competition Commission of India (CCI) had started its inquiry last year based on a consumer complaint.
The two airlines cooperate in areas such as fuel management, ground handling and cross-selling of flight tickets to select destinations. The present share of the two airlines in domestic passenger traffic is around 45%.
If CCI does detect cartelization, it can impose a maximum fine amounting to three times the profit or 10% of the individual turnover of the companies for the period of cartelization.
“CCI has decided to restart investigating into the issue of possible cartelization in the case of Kingfisher and Jet Airways which entered into an alliance in end-2008,” said a senior official at CCI who did not want to be identified. Independently, another official confirmed CCI’s action.
Dhanendra Kumar, CCI chairman, declined to comment. “We are not supposed to comment on pending cases,” he said.
CCI had started the inquiry in August 2009, but suspended it after Kingfisher moved the Bombay high court against the investigation.
The same complaint was also investigated by the Monopolies and Restrictive Trade Practices Commission (MRTPC), the former anti-trust regulator, which ruled on 4 September that there was no cause for an inquiry.
Kingfisher cited MRTPC’s conclusion before the high court as it argued that the alliance with Jet could not be probed as it was struck before the CCI Act was notified. The Bombay high court in March this year, however, dismissed Kingfisher’s petition.
Meanwhile, Kingfisher has decided to challenge the dismissal in the Supreme Court and filed a special petition on 4 May. The apex court is yet to hear the case.
Competition lawyer Samir R. Gandhi, partner at law firm Economic Laws Practice, said: “There is presently no legal fetter on the DG (director general), Competition Commission, from completing its investigation into the Kingfisher Airlines and Jet Airways alliance and the decision of the Bombay high court clearly re-affirms this position.”
A Kingfisher spokesman said: “We have filed a special leave petition in the Supreme Court, in the meanwhile we have kept the CCI advised of the same.”
The Jet Airways spokesperson could not be reached for comments. Manish Ranjan contributed to this story.
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First Published: Wed, Jun 09 2010. 09 02 AM IST