Aviation Competition Law in India

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Conclusion Competition Law is a complex mixture of a country’s law, economics and administrative action intended to favour competition in the economy. Since competition is seen as critical to economic development, competition law seeks to protect this competitiveness in the economy. The underlying theory behind competition law is the positive effect of competition in an economy’s market, acting as a safeguard against misuse of economic power. The operation of competition law by prevention of anti-competitive agreements, prohibiting abuse of dominant position by firms and regulation of combinations which might adversely affect competition in the economy, is crucial for India. It is therefore keeping that in mind that the Indian Parliament enacted the Competition Act, 2002. The preamble and the statement of objects and reasons of the Act, also evidence that the broad economic development objectives were a consideration to adopting the Act. The Indian Competition Act, 2002 (The Act) prohibits those agreements which can have an appreciable adverse effect on the competition. The Act recognizes positive synergies that emanate from agreements between the enterprises. If an agreement does not have an appreciable adverse effect on competition, then it will remain out of the purview of the provision of the Competition Act, 2002. The Indian aviation sector has witnessed tremendous growth in the recent years driven by a combination of macroeconomic; demographic; government reforms and market lead dynamics. Ever since 2003, growth had witnessed tremendous increase post arrival of Low Cost Carrier’s. Hence if the current growth trajectory is to be preserved, it is very important that competitive forces must continue to operate in the system. The year 2007 was the year of M&A in the Indian Skies. Post consolidation Indian Airlines-Air India; Jet-Sahara; Kingfisher-Deccan, these top three players had pocketed 80% of the Market Share. While many favoured these mergers as it was believed that these mergers would benefit the bleeding industry. It was believed that the consolidation would help in bringing some rationalization in the routes and help carriers focus on other routes. All three mergers came under the lens of Competition Commission of India. The merger between Indian Airlines and Air India did not pose much problem to the competition in the market as Air India mainly operated in International routes and Indian Airlines in Domestic routes. However the airline had the exclusive right to fly to Gulf, which was unfair for other domestic carriers as it was depriving them of important revenue. The Jet-Sahara Deal materialized in 2007 when Jet signed and agreed to take over 100% stakes in its arch rival. With the takeover of Sahara by Jet, some important issues over competitive concerns need to be addressed. Jet and Sahara had peak slots available on all major metropolitan airports at peak timings. There were talks that DGCA should redistribute Air Sahara’s slots to all the airlines to prevent Jet Airways from attaining a dominant position in the market. Another important issue that cropped was that post Jet-Sahara Deal and Indian Airlines–Air India deal,

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