AI-Indian merger under scanner
Posted on: 03:56 PM IST Feb 22, 2007
New Delhi: Competition Commission will scrutinise whether the Air India-Indian (Indian Airlines Ltd) combine would continue to enjoy monopoly over the lucrative Middle-East sector, even as the GoM have cleared the merger of the two airlines.
When private players were allowed to start operations on the international routes, the Government did not open the money making Middle East sector.
As per the Competition Act, no merger should create entry barriers for competition and this market could be forced open for private players.
"The merger of Indian and Air India may require intervention of the Competition Commission, which is planning to take up the issue with the Ministry of Civil Aviation," PTI quoted a source.
The Competition Commission has taken a view that the present the limited competition between the Indian and Air India would cease after their merger.
"This situation is not allowed in the law," the source said.
The Commission at present is playing more of an advisory role pending passage of an amendment bill granting it more powers.
The Competition Act, which had run in to problem because of litigation, is also likely to be amended in the coming session as the Standing Committee has already cleared the amendments.
This would happen at the same time the merger takes place.