India’s antitrust watchdog ordered an investigation into InterGlobe Aviation Ltd., which operates IndiGo, to probe allegations whether country’s largest airline abused its dominant position following mass cancellation of flights in December unleashing travel chaos.
IndiGo, which has about two-thirds market share in domestic aviation market, “effectively withheld its service from the market, creating an artificial scarcity, limiting consumer access to air travel during peak demand,” the Competition Commission of India, or CCI, said in an order on Wednesday.
Such conduct by a “dominant enterprise” may be viewed as restricting the provision of services, CCI added. The regulator asked its director general for investigation to submit a report in 90 days after which it’ll decide on any further action.
IndiGo shares dropped as much as 3.6% in Mumbai on Thursday.
The antitrust body’s scrutiny is the latest blow for the airline after India’s aviation regulator imposed a penalty last month, cautioned IndiGo’s Chief Executive Officer Pieter Elbers. IndiGo’s cancellations had triggered a massive aviation crisis in India stranding thousands of passengers after the airline failed to prepare for new rules around staff rest, leaving it with a pilot shortage.
A spokesperson for IndiGo did not immediately respond to an email seeking comments.
“The scale and timing of the cancellations, coupled with the airline’s market power, raise concerns of denial of market access and potential consumer harm,” the CCI said in the order, adding that it led to fare spikes and limited alternatives for stranded passengers.
The case was triggered by a complaint from an individual passenger that this IndiGo flight was canceled hours before departure, forcing him to book an alternative. But the informant observed that the seats being offered by IndiGo were priced much higher than the usual fares.
The order said the airline saw cancellations of 2,507 flights and delays in 1,852 during that period.
If the investigation confirms abuse of dominance, IndiGo could face financial penalties or behavioral remedies, though the current order does not amount to a finding of wrongdoing.
–With assistance from Mihir Mishra.
Disclaimer: This report is auto generated from the Bloomberg news service. ThePrint holds no responsibility for its content.
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