CCI orders probe into IndiGo over alleged abuse of dominance after mass flight cancellations

CCI observed that passengers were left “with no choice but to accept last-minute cancellations” and were forced to seek alternatives at “significantly higher prices”. Given IndiGo’s dominant position, consumers were “effectively locked out and lacking viable alternatives.”

In a 16-page order dated February 4, the CCI directed the Director General (DG), the watchdog’s investigative arm, to examine whether IndiGo had violated the provisions of the Competition Act by canceling thousands of flights on its network and then charging significantly higher fares to stranded passengers.

This marks the beginning of the investigation.

“…CCI directs the Directorate General to initiate an investigation into the matter and submit an investigation report within 90 days from the date of receipt of this order,” the order by CCI president Ravneet Kaur and three members Anil Agarwal, Sweta Kakkad and Deepak Anurag said. The statement is included.

The anti-trust body also said that IndiGo had created an ‘artificial shortage’.

Queries sent to the airline were not answered by press time. IndiGo received the order.

By canceling thousands of flights constituting a significant portion of the planned capacity, the court said, “IndiGo has effectively withheld its service from the market by creating an artificial shortage, restricting consumer access to air travel at a time when demand is at its highest. Such conduct by a dominant entity may be viewed as restricting the provision of services under Section 4(2)(b)(i) of the Act (on abuse of dominant position).”

dominant position

“The aforesaid conduct of OP (IndiGo) prima facie appears to cause a significant adverse impact on competition in India. The Commission is therefore of the view that there has been a prima facie violation of the provisions of Sections 4(2)(a)(i) and 4(2)(b)(i) of the Act by OP (IndiGo) in the present case.”

Section 4 of the Competition Act 2002 deals with abuse of dominant position.

For context, IndiGo suffered an operational collapse in the first week of December, with more than 4,500 flights canceled and thousands of passengers stranded at airports across India. The airline told the DGCA in December that the disruption was due to minor technical glitches, winter schedule changes, bad weather conditions, increased traffic congestion and the introduction of flight duty time limitations (FDTL) Phase II norms.

The revised rules mandate stricter night flying limits and longer pilot rest periods, thus increasing crew requirements.

However, an investigation conducted by the DGCA on January 17 revealed that over-optimized operations and inadequate regulatory preparations led to disruptions. It also flagged deficiencies in system software support.

The regulator said the airline failed to plan adequate buffers and implement FDTL norms properly, leading to widespread delays and cancellations.

One such aggrieved passenger, Kartikeya Rawal, took CCI action alleging that his return flight on IndiGo was canceled just a few hours before take-off without any alternative arrangements, forcing him to re-book with the same airline at a much higher price. The informant had initially paid money ₹7,173 for a return ticket, but in the end two days later ₹17,000.

CCI noted that this was not an isolated incident. “The issue was also widely reported in the public domain,” the regulator said in its order, adding that passengers were stranded across the country. Between December 3 and 5, 2,507 flights operated, of which 1,852 were delayed, affecting more than three lakh passengers.

Power over the market

“The harm is no longer limited to this route and that route; rather, this behavior restricts the ability of consumers generally to use domestic air travel as a means of transportation,” he said.

Noting IndiGo’s dominance, the Commission relied on data submitted by the Directorate General of Civil Aviation (DGCA), the country’s aviation regulator. CCI observed that data shows that IndiGo accounted for around 60-61% of domestic passenger volume and capacity in the last two financial years. In FY25, IndiGo carried more than 104 million passengers.

CCI also highlighted IndiGo’s extensive network. It has been observed that IndiGo operates on 643 out of approximately 835 domestic city pair routes and is the sole operator on more than 330 routes in recent months. “Such structural presence on multiple monopoly routes constitutes an important indicator of market power,” CCI said.

In addition, the Commission noted that IndiGo operates the largest fleet in India with more than 400 aircraft and is the only major airline to consistently report profits while most of its competitors continue to make losses.

“Based on significant and sustainable market share, broad network reach with dedicated operations on a significant number of city pair routes, relatively larger fleet and strong financial performance, the Commission is prima facie of the view that (IndiGo) enjoys a dominant position,” the decision said.

He further stated that IndiGo “is a major market player not only in terms of absolute number of passengers carried but also in terms of Available Seat Kilometers (ASKM) passenger capacity, which reflects its significant scale of operations and capacity spread in the domestic aviation market.”

DGCA’s observation

IndiGo has consistently accounted for around 60-61% of total domestic ASKM, reflecting not only passenger volumes but also effective control over market capacity and supply-side conditions, CCI said. “The domestic passenger aviation market exhibits very high and increasing concentration, suggesting that leading firms have the ability to operate independently of competitive forces because the existence of effective competitors is materially constrained,” the anti-trust agency said. he said.

When ordering the investigation, the commission declared that its findings were preliminary. “Nothing stated in this order constitutes a final statement of opinion on the merits of the case,” he said.

The DGCA itself informed the Commission that it did not have economic regulatory authority over flight tickets. In its submission, the aviation regulator stated that “air tickets are not regulated by DGCA” and that it does not have the authority to conduct competitive analysis such as market definition, dominance assessment or examination of coordinated behavior.

“The Commission has asserted its authority over economic conduct in the skies by rejecting the argument that DGCA’s oversight under the new Bhartiya Vayuyan Adhiniyam (BVA, 2024) precludes antitrust scrutiny,” said Rohit Jain, managing partner of legal consultancy firm Singhania & Co.

“The finding that IndiGo, with over 60% market share, was prima facie dominant and may have abused that position through artificial scarcity and unfair pricing, puts its operational strategies under intense legal scrutiny. The decision sets a critical precedent that the aviation industry is not immune from antitrust scrutiny even with the new BVA 2024 in place, and also shows that no airline can rely solely on DGCA compliance to avoid competition liability,” it added.

Another lawyer said this was a big win for passengers affected by flight cancellations.

“CCI’s order is a timely reminder that market leadership comes with increased responsibility. Competition law does not punish selective success, but requires dominant players to operate within clear legal boundaries to maintain fair choice in the market. A big win for passengers affected by disrupted flight services,” said Bharat Kumar, associate partner, Saikrishna & Associates.

According to Anish E. Raveendran, Advocate of the Bombay High Court, it is clear that the Commission has found sufficient prima facie material to conclude that IndiGo, a dominant entity in the relevant market with a 60% market share in domestic air passenger services, may have violated certain sections of the Competition Act.

“The order for a detailed investigation increases the airline’s legal risk from non-compliance with legislation to potential antitrust liability. This issue is also of precedent importance for the aviation industry, especially in relation to the obligations of dominant market participants during periods of peak demand,” Raveendran said.