Shares of InterGlobe Aviation fell sharply on Thursday after the Competition Commission of India (CCI) ordered it to launch a detailed investigation into IndiGo over alleged unfair trade practices. The stock fell more than 3% during the morning session. On the BSE, shares of the airline’s parent company fell 3.65% to Rs 4,782.45, while on the NSE they fell 3.63% to Rs 4,780.30. At 1:55 pm, Indigo was down 72 points or 1.4% at 4,888 on the NSE, while the stock was down 1.5% on the Bombay Stock Exchange. The selling pressure came after a 16-page order passed by the competition regulator on Wednesday, in which it had directed a full investigation into IndiGo. The order comes nearly two months after the airline canceled thousands of flights due to operational issues, an incident that caused massive inconvenience to passengers. Based on its assessment of airline data and information submitted by aviation regulator DGCA, the CCI said it has formed a prima facie opinion that IndiGo has abused its dominant position in the market. The regulator found that the scale of flight cancellations represented a large portion of the airline’s scheduled capacity. The Commission said the cancellations resulted in the effective withdrawal of services from the market, resulting in artificial shortages and reduced consumer access to air travel during periods of high demand. “Such conduct by a dominant enterprise may be viewed as restricting the provision of services under Section 4(2)(b)(i) of the Act,” the CCI said. Section 4 of the Competition Act deals with abuse of a dominant position. Citing a prima facie finding of appreciable adverse impact on competition in India, the CCI directed its Director General (DG) to conduct a detailed investigation into the matter.
