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Don’t see need for cap or floor for air fares: CCI

In an interview to CNBC-TV18, Ashok Chawla, Chairman, Competition Commission of India, discussed complaints over airfare pricing witnessed over the past years as well as whether there was a need for the regulator to disclose how it arrives at quantum of penalty in cases it passes an order on.

In an interview to CNBC-TV18, Ashok Chawla, Chairman, Competition Commission of India, discussed complaints over airfare pricing witnessed over the past years as well as whether there was a need for the regulator to disclose how it arrives at quantum of penalty in cases it passes an order on.

Below is the transcript of Ashok Chawla’s interview with Alexander Matthew on CNBC-TV18.

Q: What is your stand on flash sales undertaken by some airline carriers?

A: The position conceptually is that where the market forces are supposed to operate and there are no regulations in place. Then the market will determine what the airfares are. So, there should ideally be no place for either a cap or a floor on airfares or for that matter for any kind of prices in the market.

Q: Speaking about the penalties that have been imposed in the past several people have pointed out that they are unaware of the computation of those penalties. What does the CCI have to say as far as the quantum of penalties that has been levied in the past, why is it to that extent and how is it computed?

A: The orders do try to give some broad qualitative idea of how we have arrived at the certain penalty and what is the percentage of penalty that we impose on an enterprise. We do not have and we do not wish to have at this stage elaborate and detailed penalty guidelines which are mathematical in nature as there are in some other jurisdiction and in the European Union for instances which is an example which is often given to us.

Our view is that for some more time the orders will indicate the manner in which the commission approaches the issue of penalty within of course the band which the act provides for zero to ten percent. So, within that band we will operate we will give out the rational logic.
Transcript to follow

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