Did IndiGo create an ‘artificial shortage’ of seats? CCI orders probe after December flight chaos

CCI has ordered a DG probe into IndiGo over mass flight cancellations, flagging prima facie abuse of dominance and possible harm to competition and passengers.

• CCI orders probe into IndiGo for alleged abuse of market dominance
• IndiGo's mass flight cancellations may have created artificial scarcity
• Director General to conduct detailed investigation into IndiGo's practices

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The Competition Commission of India (CCI) on Wednesday ordered a detailed investigation against IndiGo for alleged unfair business practices, nearly two months after the country’s largest airline cancelled thousands of flights, disrupting travel plans for lakhs of passengers.

After examining airline data and inputs from the aviation regulator DGCA, the watchdog said it had prima facie found that IndiGo abused its dominant position in the domestic aviation market, according to a report by PTI.

‘Artificial scarcity’ flagged

In its 16-page order, the CCI said that IndiGo’s mass cancellation of flights, accounting for a significant share of scheduled capacity, amounted to withholding services from the market during a period of peak demand.

Such conduct, the regulator said, may have created “artificial scarcity” and limited consumer access to air travel, potentially violating Section 4(2)(b)(i) of the Competition Act, which deals with abuse of dominance, PTI reported.

Market dominance under scrutiny

For assessing a complaint filed by an affected passenger, the CCI defined the relevant market as domestic air passenger transport services in India.

The regulator noted that IndiGo consistently accounts for around 60–61 per cent of total domestic ASKM (Available Seat Kilometres), reflecting effective control over capacity and supply-side conditions.

“The domestic passenger aviation market exhibits very high and increasing concentration,” the CCI said, adding that leading firms appear capable of operating independently of competitive forces due to constrained rivalry, as per PTI.

Based on its sustained market share, extensive network with exclusive presence on several city-pair routes, larger fleet size and strong financial performance, the watchdog said IndiGo enjoys a dominant position in the market.

DG to conduct detailed probe

Observing that the airline’s conduct may have caused an appreciable adverse effect on competition, the CCI directed its Director General (DG) to conduct a detailed investigation.

Jurisdiction challenge rejected

The commission rejected IndiGo’s argument that it lacked jurisdiction in the matter, citing a Supreme Court ruling to underline that sectoral regulators and the competition watchdog have distinct roles.

While regulators such as DGCA oversee licensing, safety and operational supervision, they do not conduct competition law analysis, including market delineation, dominance assessment or evaluation of adverse effects on competition, the CCI said, PTI reported.

December disruptions

IndiGo faced severe operational disruptions in early December, prompting the DGCA to cut the airline’s winter schedule by 10 per cent until February 10.

Between December 3 and 5, a total of 2,507 flights were cancelled and 1,852 delayed, affecting over 3 lakh passengers nationwide, the regulator said on January 20.

IndiGo, which has held more than 63 per cent of the domestic air traffic market for several months, saw its share decline to 59.6 per cent in December, according to official data.