Wednesday, February 24, 2016

IndiGo's predatory recruitment of Air India's trained pilots is an employment issue: CCI

Mere recruitment of trained pilots of an airline by another airline will not bring about structural changes in the operations of the market. CCI rejected Air India's allegation of predatory recruitment of its trained pilots against IndiGo saying the matter is more of an employment issue Facts:

a) The informant, Air India Ltd. filed complaint against InterGlobe Aviation Limited (the ‘IndiGo’) under section19(1)(a) of the Competition Act, 2002 (the ‘Act’) alleging, interalia,
contravention of the provisions of section 4 of the Act

b) It was alleged that the IndiGo has systematically indulged in predatory recruitment of trained pilots of the Air India for its proposed expansion and inducing them to breach contractual and other obligations.

c) It is further alleged that the IndiGo, by indulging in unlawful predatory recruitment practice, acquired a 52% market share in the non-metro to non-metro flight sector, making it a monopoly in that sector.

d) The Informant also stated that the Director General of Civil Aviation (DGCA) had made it
mandatory for pilots to obtain ‘No Objection Certificate’ and, accordingly, all Airlines must

ensure that the pilots hired by them have to serve the required six month notice period however, the IndiGo continued to disregard this direction of DGCA

e) The Informant prayed to the Commission to intervene for ensuring free and fair competition in the aviation industry and also prayed to inter alia impose penalties on the
IndiGo for alleged abuse of dominant position The Competition Commission of India held as under:

1) The allegations leveled against IndiGo did not seem to raise any competition concern in the market. It said that “an airline recruiting another airline’s pilots will not bring about structural changes in the operations of the market”.

2) That there is no bar on the Air India or any other airlines from recruiting pilots belonging to other airlines after seeking ‘No objection Certificate’ from them, which indicates that there exists a flexibility with respect to the pilot recruitment.

3) The Commission said that it was more of an employment issue than a competition issue.
Therefore, the issues alleged in the complaint did not raise any competition concern within
the meaning of the Act.
4) The Commission did not find any contravention of the provisions of section 4 of the Act
against the IndiGo and, accordingly, directed to close the matter under the provisions of
section 26(2) of the Act. - [2016] 66 taxmann.com 262 (CCI)
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