CCP starts probe into rise in airfares after strike by PIA employees
ISLAMABAD: In a bid to probe sharp rise in airfares after strike by the PIA employees, the Competition Commission of Pakistan (CCP) has sought data from the private airlines.
The CCP is mandated by the Competition Act, 2010 to check anti-competitive practices by business organizations. Such practices include excessive increase in prices by business firms having market power and collective fixation of prices or collusion by competing businesses.
The CCP is probing the matter under the law and strict action will be taken against any undertaking indulging in anti-competitive practices.
In this regard, two separate letters have been sent in the name of Chief Executive Officer Shaheen Airlines Ehsan Khalid Sehbai and Chief Executive Officer Airblue Tariq Chaudhry with the title ‘Exorbitant airfares charged by private airlines’. These letters have been signed by Director Cartels and Trade Abuse Department Syed Umair Javed.
The copies of the letters available with Customs Today reveal that CCP has sought information about the number of aircrafts currently being operated by each private airline. Actual airfare charged by airline from each passenger for each flight operated on domestic routes in the period January 01-31.
Actual airfares charged by airlines from each passenger for each flight operated on domestic routes in the period February 01-04. The letters draft further stated that CCP brought the issue in the notice of airlines that unreasonable price increase by dominant businesses and collective price fixing between competitors are anti-competitive activities that should be avoided at costs.
It is pertinent to note here that anti-competitive business conduct can have harmful effects on the level of competition in the economy and thus, on consumers.
The Competition Act, 2010, prohibits undertakings from abusing a dominant position in the market, participating in anti-competitive agreements, and resorting to deceptive marketing practices that could result in a transaction based on incorrect or inaccurate information.
It also reviews mergers between undertakings that could result in significant impediments to effective competition. Through advocacy, the Commission encourages voluntary compliance and promotes a ‘competition culture’ to take root in the economy.
Moreover, the Competition Act, 2010 is based on international best practices, considers the current economic realities and corrects the deficiencies of the Monopolies and Restrictive Trade Practices Ordinance (MRTPO) of 1970 related to definitional aspects, coverage, penalties, and other procedural matters. It covers all sectors of the economy, regardless of their public or private ownership.