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Indian antitrust body fines airlines over cargo price-fixing

The Competition Commission of India (CCI) has cracked the whip on three different airlines for what it deemed as determined action in fixing and amending fuel surcharge (FSC), which is a component of freight charges.

The CCI came out with the decision after an extensive investigation stemming from charges that the airlines were running a cartel.

The heaviest penalty was that of Jet Airways, which was slapped a fine of Rs39.81 crore ($6.1 million). Fines of Rs9.45 crore and Rs5.10 crore were sanctioned to InterGlobe Aviation andInterGlobe Aviation, respectively.

The CCI explained that the revenue generated by the airlines from their air cargo transport services was the basis of the amount of the fines.

“Considering the financial position of airlines at the relevant time and noting that FSC constitutes about 20-30% of cargo revenue, [the] penalty was imposed by the commission at 3% of their average relevant turnover of the last three financial years,” the CCI said.

The CCI said it had given “cease and desist” orders against the three airlines and that it had already condemned the airlines’ use of FSC as a pricing device.

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