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CCI Probing Alleged Fixing Of Airfares Using Algorithm By Airlines

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The Competition Commission of India is looking at algorithms used by airlines to determine fares, as part of a detailed probe into alleged fixing of air ticket prices, the regulatory body’s chief Sudhir Mital said.

Currently, the fair trade regulator is investigating allegations of similar pricing as well as simultaneous increase in ticket prices by the airlines. The cases pertain to steep fluctuations in airfares during the 2016 Jat agitation in Haryana, and the 2015 floods in Chennai, among other instances in the last few years.

Mital said that CCI was looking into a couple of cases of alleged price fixing by airlines. “We are trying to work out the pricing pattern followed by airlines. Airlines have often stated that similarity in airfares as well as increase in prices is an outcome of demand based dynamic pricing by the software used by them,” he told PTI. “Unless and until the issue is examined and looked into in detail, we cannot say much at this stage.”

There have been instances of spike in air ticket prices during festivals and natural calamities. Earlier this year, some Rajya Sabha members had also sought a cap on airfares.

"Basically, one case being looked into is about similarity in prices of different airlines for the same route that customer often comes across while booking tickets and the other is about surge pricing, for example, how is that during Jat agitation all airlines on the same day decided to increase the prices" - Sudhir Mital, Chairman, CCI

The regulator is waiting for a report from its investigation arm Director General. Generally, cases where the CCI has found prima-facie evidence of violations of competition norms are referred to the DG for a detailed probe.

“We have asked the DG to look into the algorithms used by the airlines for determining the fares to ascertain whether the airlines have coordinated to fix prices or the algorithms function on their own to determine the prices,” Mital said. Further, he said the process starts only after the DG submits its report.

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