1. The present order relates to a reference dated 06.05.2011 received by the Commission from Ministry of Corporate Affairs, Government of India ("MCA") under section 19(l)(b) of the Competition Act, 2002 (the Act). In the reference it was stated that due to the strike called by the pilots of Air India with effect from the midnight of 26th April, 2011, different airlines had started charging exorbitant fares for the tickets. It was also mentioned in the said reference that in normal course also one could not buy tickets online, even though seats were available, and tickets had to be bought at higher prices near to the date of departure. The Commission was also asked to consider the possibility of passing an order under section 33 of the Act.

2. The Commission considered the above reference and decided to call a representative of Directorate General of Civil Aviation (DGCA) on 09.05.2011 in order to ascertain details about the fares during the period and also to ascertain the practice adopted by various airlines as regards booking of tickets. A preliminary report from Director General (DG) was also called which was received on 09.05.2011.

3. The Commission after considering various aspects of the case in its meeting held on 09.05.2011 arrived at a conclusion that there exists a prima facie case and passed an order under section 26(1) directing the DG to cause an investigation into the matter.

4. In order to consider the matter under section 33 of the Act, notices were issued on 10.05.2011 to the airlines. While the matter was considered on 13.05.2011, the authorized representatives of various airlines requested for a time of one week to file written submissions in response to the aforesaid notice. The Commission considered their request and directed them to file written submissions by 20.05.2011 and to appear before the Commission on 25.05.2011 to explain their position.

5. The Commission considered the matter on 25.05.2011 when authorized representatives from various airlines argued their case. The submissions of various airlines are summarised as under:

5.1 In its replies, M/s Spice Jet Limited submitted that its air fares were on an average about 7% higher as compared to the previous two weeks prior to strike by the pilots of Air India i.e. from 13th April to 26th April, 2011. There was a spurt in demand and load factor went up from 73% to 84% during the strike period. This, however, cannot be seen as either unusual or abnormal as the holiday season coincides with end April period and a 7% to 10% increase in fares is usually observed during the period beginning with end April through May.

5.2 It was also stated that fares during the period between 27th April and 8th May 2011 were higher by about 9% on Year to Year basis and load factors were higher by 140 basis points. Moreover, during this period fuel prices also had increased by around 35%-40% which contributed to higher fares. Further, fares for the period 9th May to 11th May 2011 (post strike) were only marginally lower by 2% - 3% over the period of the strike, clearly illustrating that the higher fares were a direct reflection of the higher input cost rather than attributable to any abnormal increase in fares.

5.3 The airline also submitted that SpiceJet was the first private carrier to initiate support to Air India during strike period and had committed Air India to help in carrying their passengers. The airline had agreed on a fare with Air India which was around 10% lower than the prevailing last week's fares and were in constant touch with the Air India management to minimise the impact of disruption on their passengers. During the strike period, it carried 5554 passengers of Air India on the pre-agreed rates of Air India on its flights. In fact, on several of the flights it had offered even the last available seats to Air India so that they could manage their disrupted passengers better.

5.4 The airline also submitted that it would be very pertinent to point out that o