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Last Updated : Oct 23, 2019 04:52 PM IST | Source: PTI

Competition Commission probes Hyderabad airport operator GHIAL for unfair biz ways

The order against GMR Hyderabad International Airport Ltd (GHIAL) has come on a complaint filed with the watchdog by Air Works India (Engineering) Pvt Ltd.


Competition Commission has ordered a detailed probe against Hyderabad international airport operator GHIAL for alleged abuse of dominant position and denial of market access to a leading MRO services provider.

The order against GMR Hyderabad International Airport Ltd (GHIAL) has come on a complaint filed with the watchdog by Air Works India (Engineering) Pvt Ltd.

Air Works is into providing maintenance, repair and overhaul (MRO) services of aircraft to airlines and general aviation.

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"... the facts of the present case prima facie suggest denial of market access to the informant coupled with exclusionary motive by GMR to favour its own group entity (i.e. GAT). Owing to its dominance in the upstream market and its presence in the downstream market, GMR seems to have distorted the level playing field," the regulator said in a 21-page order.

The complaint was filed against GHIAL and GMR Aero Technic Ltd (GAT), a wholly-owned subsidiary of GMR Aerospace Engineering Ltd. The latter is a wholly- owned subsidiary of GMR.

It was alleged that GMR owing to its sole control over the Hyderabad airport premises has denied access to Air Works for providing the Line Maintenance Services with an intent to give advantage to GAT at the aerodrome.

Line Maintenance Services can include activities like trouble shooting, defect rectification, component replacement, schedule maintenance and/or checks, minor repairs and modifications and visual inspections. Such service is required to be provided during the time between the landing and take-off of any aircraft to declare it airworthy and make it fit for departure.

To assess the complaint, Competition Commission of India (CCI) considered the markets for 'provision of access to airport facilities/ premises' and 'provision of Line Maintenance Services' at the Rajiv Gandhi International Airport (RGIA).

Hyderabad aerodrome is known as RGIA.

The watchdog noted that the alleged conduct by GHIAL has the potential to limit and restrict the provision of Line Maintenance Services and the technical development relating to provisioning of such services to the prejudice of consumers within certain provisions of the Competition Act.

"The Commission is of the considered view that prima facie a contravention with regard to Section 4(2)(b), Section 4(2)(c) and Section 4(2)(e) of the Act is made out against GMR," the order, dated October 3, said.

Section 4(2)(c) pertains to limiting and restricting provision of services that adversely impacts competition in the relevant market. Section 4(2)(c) relates to denial of market access while Section 4(2)(e) is about leveraging of dominant position in the upstream market to protect the downstream market.

According to the order, since GMR is the major shareholder of GHIAL, it has been used synonymously with the latter for the purposes of analysing the case.

Response from GMR

“GMR Group would like to clarify that, the Order of Competition Commission of India (CCI)  dated 03.10.2019 has already been stayed by the Hon’ble High Court of Telangana on 16.10.2019 and the matter is sub-judice.

We would like to present the facts of the case as follows:

  •  GHIAL had given space on the airside of the Hyderabad Airport to Airworks under an agreement for carrying out their business activities of line maintenance.

  • The term of the space agreement expired on 22.03.2019.

  • In view of the need of the space for the airport expansion works and also as the space agreement expired, Airworks was requested to vacate the premises.

Aggrieved by the vacation notice issued by GHIAL, Airworks approached Hon’ble High Court of Telangana on 02nd July, 2019 seeking extension of space agreement and sought interim relief to continue in the space.

The Single Judge Bench of Hon’ble High Court dismissed the interim application of Airworks. Against the said order, Airworks filed an appeal before the Division Bench of the Hon’ble High Court and the said appeal was also dismissed on 16.08.2019 upholding the Hon’ble single judge Bench order with an observation that “the transaction entered between the parties is purely a commercial one and no element of public interest is involved” and as the appeal was devoid of merits was dismissed. The writ petition filed by Airworks is still pending with the Hon’ble High Court for adjudication.

While the writ petition is pending, Airworks approached CCI on the same issue and sought relief. CCI  passed the ex-parte order on 03.10.2019. GHIAL challenged the said order before the Hon’ble High Court since the issue is sub-judice in the writ petition filed by Airworks before the Hon’ble High Court.  On 16.10.2019 the Hon’ble Court was pleased to stay all further proceedings before CCI. On 17.10.2019 GHIAL brought to the notice of CCI about the stay order of the Hon’ble High Court and also submitted a copy of the same to it. In compliance with the stay order of the Hon’ble High Court, on 17.10.2019 the CCI was pleased to defer the further proceedings. Hence, the order of CCI is in abeyance  and cannot be acted upon.”

Note: The copy has been updated with the response from company

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First Published on Oct 21, 2019 10:49 pm
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