CCI probes IndiGo for dominance abuse, fare hikes after December flight cancellations

The Competition Commission of India (CCI) has ordered a probe into IndiGo for allegedly using its strong market position to increase airfares after cancelling flights across its network in December.

“It is observed that passengers who had booked tickets were left with no real choice but to accept last-minute cancellations. Further, passengers were left to seek alternatives, on their own, at significantly higher prices,” notes the CCI in its order dated February 4.

Between December 3 and December 10, IndiGo cancelled nearly 4,200 flights. In November, it had already cancelled about 900 flights. In total, around 5.9 lakh passengers were affected by these cancellations up to December 9.

The CCI adds that “given IndiGo’s dominant position, consumers were effectively locked in and lacked viable alternatives”. Further, “by cancelling thousands of flights constituting a significant portion of the scheduled capacity, IndiGo effectively withheld its service from the market, creating an artificial scarcity, limiting consumer access to air travel during peak demand.”

These factors make the airline violative of two provisions of the Competition Commission Act 2002 that prohibit abuse of market dominance, the CCI order states.

These provisions include abuse of dominant position that directly or indirectly imposes unfair or discriminatory condition and price in purchase or sale (including predatory price) of goods or services.

The CCI has ordered the Director General to carry out an investigation and submit a report within 90 days.

The order stems from a complaint by a passenger who was booked to fly from Delhi to Bengaluru via Goa on December 5 for ₹7,173. The airline allegedly cancelled the flight without offering any alternative travel arrangements. As other available flights were priced significantly higher, the passenger was forced to delay his return and book a flight two days later at more than double the original fare, paying ₹17,000.

Following an inquiry, the Directorate General of Civil Aviation imposed a fine of ₹22.2 crore, finding that the airline had overstretched its crew and aircraft and failed to provide adequate operational buffers.

IndiGo had released ₹1,100 crore in refunds, according to government data. The airline also offered ₹10,000 vouchers to passengers it deems were severely impacted due to flight cancellations between December 3 to 5.