The Competition Commission of India (CCI) has initiated an inquiry into the pricing of air tickets after it found that airlines were allegedly following a similar pattern while setting tariffs, thus making the process anti-competitive.
Airlines follow a bucket system in pricing their tickets, wherein fares are lower if the ticket is booked in advance. Tariffs increase when the travel is booked closer to the date of departure.
Airlines say that this is a software-based system which takes into account historical booking patterns while pricing the tickets.
CCI, a fair trade regulator, is investigating allegations of similar pricing as well as a simultaneous increase in ticket prices by airlines. The cases pertain to steep fluctuations in airfares during the Jat agitation in Haryana, floods in Chennai, among other instances, in the last few years.
According to CCI chief Mr. Sudhir Mittal, during the Jat riots in Haryana, all airlines decided to increase the price of tickets on the same day. A similar thing happened in 2015 when floods hit Chennai.
The regulator is waiting for a report from the Director General (DG), which is its investigation arm. Generally, cases where the CCI finds evidence of violations of competition norms, DG is detailed to investigate.
Mr. Mittal has said that they have asked the DG to look into the algorithms, used by airlines for determining fares, to ascertain whether airlines coordinated to fix prices or the algorithms function on their own to determine prices.
CCI, which keeps a tab on unfair business practices across all sectors, has the power to penalise entities for anti-competitive ways and direct them to cease operations or desist from indulging in such practices.