TMI Blog2013 (1) TMI 532X X X X Extracts X X X X X X X X Extracts X X X X ..... of service and also air fare charged by the airlines. It is not necessary that the route taken by one airlines operating would be the same in case of other Airline operating on that route. It could be via some other city. It will make no difference to the consumer so long as airline reaches the consumer to his destination. Therefore, it would be wrong to hold one route as the relevant market for that particular airlines. CCI is right in holding that the relevant market for the respondents was the international routes reaching from and to India from the foreign destinations and not a particular route of being operated by a particular airline. Director General had concluded on the basis of his investigation that it was not proved that foreign airlines hold about 90 per cent market share in the relevant market of international flying to and fro from India. The appellant was unable to give any specific statistics before the CCI or even before the Court. On the other hand, from the documents on record, it is clear that none of the nine foreign airlines has substantial market share in the relevant market of international flight services in India. Thus Director General referring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntative body for the travel agents. It was claimed that the respondents, who were the airlines, used to pay commission on the sale of tickets up to 5% to the travel agents. It was urged that from 1.11.2008 most of the airlines stopped giving such commission to the respondents. In the case of Austrian Airlines, it discontinued the commission from 1.1.2009. It was urged that these airlines had formed a cartel and were also abusing the dominant position. It was also urged that the respondents had not followed the directives of the Aircraft Rules, 1937 as they were not informing the customers about the break-up of the fares. It was urged that the respondents were deliberately and intentionally not enforcing the transaction fee system which was a model introduced by them in lieu of prevailing commission system and this caused to deprive of the income to the members of the informant's association. It was also complained that such concerted action on the part of the respondents had created a monopolistic market which was detrimental to the interest of the economy and thereby the competition was adversely affected in the airlines business in the country. 3. This information was considere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... based on the seats strength. It was deduced that no respondent individually was in a dominant position in the relevant market. He, therefore, concluded that there was no question of breach of Section 4 of the Act. As regards the complaint of the informant that members suffered financially and became jobless, the Director General concluded that the business of booking of tickets through travel agents had not gone down after the opposite parties (respondents) resorted to the practice of abolition/reduction of commission. On this basis, the Director General gave a negative report on the information lodged by the appellant. 7. This report was forwarded to the parties for filing their replies. 8. The informant/appellant, inter alia, contended that the Director General had incorrectly given clean chit to the opposite parties (respondents) and that the process of investigation adopted was devoid of procedural discipline. It was further urged that there was an appreciable adverse effect on the competition in India and there was no justification on the decision of the respondents not to offer the commission. It was also further urged that the Director General had wrongly determined the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of Air Canada. 13. Respondent - KLM Royal Dutch Airlines relied on the DG's report. It also raised a plea that the matter pertaining to the period prior to May, 2009 could not be examined. 14. Respondent - Swiss Airlines also supported the DG's report. Singapore Airlines also relied on the DG's report and asserted that its decision to implement zero per cent commission was an independent decision based on the recommendations and policy of its head office. It was further urged that such decision could not be said to be an agreement. It also rejected the plea that they were dominant player in the market. 15. During the pendency of this matter before the CCI, the Travel Agents Federation of India also sent a letter stating that they should also be heard before any decision is taken. However, the CCI did not allow them to take part in the proceedings since they had approached at a very late stage. Some additional written submissions were filed by the informant wherein it was mainly submitted that the relevant market in the present case ought to have been taken as the routes on which these airlines operate independently and not the entire Indian air space. It was asserted that v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by CCI that none of the foreign airlines had substantial market share in the international flights in India. The CCI also held that there was no question of violation of Section 4 as the dominance under that section was relevant for a single enterprise or group of enterprises and there was no single enterprise or group of enterprises meaning thereby that there was no question of any dominance or its abuse. The CCI also deduced that there was no evidence for meeting of minds in between the airlines before the decision to stop paying commission was taken. The CCI also endorsed the finding of the DG that number of IATA Travel Agents had increased after this decision was taken and that it cannot be presumed that this was an action taken in consultation with each other. The CCI also found that prices of the air tickets had not gone up after the abolition of system of commission. In that view the CCI passed an order closing the enquiry. 17. Shri B.S. Chauhan, advocate appearing for the appellant advanced lengthy arguments reiterating the complaint. His contention was that the Director General had wrongly determined the relevant market and that in fact the relevant market vis- -vis par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble on the Website of Central Asia Pacific Aviation (CAPA). It was criticized by the learned counsel that the credentials of the said body were not established. The learned counsel, however, could not give any other statistics and instead asked us to believe on the Comptroller Auditor General's Report. According to which the market share of these airlines in case of Lufthansa German Airlines was 87%; Australian Airlines was 86%; Air France was 73%; KLM Royal Dutch Airlines was 76%; Swiss International Airlines Ltd was 63% and Singapore Airlines was 49%. We must clarify that this data is not for the percentage of individual market share. It pertains to the number of passengers travelling to and from various destinations in India under 6th freedom carriage. The total of these percentages goes beyond 100% and comes to 434%. It is, therefore, not possible for us to rely on Comptroller and Auditor General Report as it is not relevant to the controversy. 19. We have seen the figures from the report of the Director General. The Director General has referred to the information available to the D.G.C.A. and has come to the conclusion that individually none of the opposite parties has a ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts inter se. In the absence of any evidence it is very difficult to reach to the conclusion of a cartel. In our opinion, the CCI has rightly refused to read any cartel on the part of these airlines and as rightly concluded that the decision to withdraw commission system and substituting the same with another was in terms of the world trend and as such cannot be found fault with. 21. The CCI has in no uncertain term held in the agreement with the D.G. that the decision by these airlines were the independent decision and as such there could be no question of violation of Section 3(3) of the Act. It cannot be forgotten here that it is not as if the travel agents have been left high and dry. There is no evidence that the travel agents have suffered. On the other hand in the line of world trend, the system has been substituted with Net Fare Model all over the world and not only in India. 22. Therefore, there was no question of proceeding further. 23. If what was said in the complaint was true then it would have resulted in the decrease in the number of the IATA Travel Agents. But the report of the Director General says that this has not happened and in fact number of travel agents ..... X X X X Extracts X X X X X X X X Extracts X X X X
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