COMPAT by its order dated April 12, 2016 has upheld order of CCI which had dismissed allegations of abuse of dominance by DIAL in charging licence fee from airlines using the space allotted to them at Indira Gandhi International Airport, New Delhi.
The Information was filed in CCI by Airline Operators Committee alleging abuse of dominance by DIAL in the relevant market by arbitrarily revising licence fee for the space made available to various airlines operating at IGI Airport. As per the agreement dated December 23, 2013 executed between DIAL and Air France, supplied by the Informant, the licence fee for using the allotted space at IGI Airport was INR 1214.99/sq. mtr. subject to escalation at the rate of 7.5% every year. The said agreement was valid for the period ending March 31, 2015. Upon expiry of the agreement, DIAL sent a notice dated March 03, 2015 to Air France and other airlines that the licence fee for the financial year 2015-16 will be INR 2615.72/sq.mtr.
After about eight months of the above notice, the Airline Operators Committee (New Delhi) filed the case in the CCI. However, the CCI declined to order investigation in the allegation observing that the escalation clause which envisaged increase at the rate of 7.5% every year cannot be invoked by the airlines on expiry of the agreement and the demand of enhanced licence fee post the licence period cannot be termed as unfair.
The COMPAT agreed with the opinion of CCI. The COMPAT noted that prior to April 01, 2015, various airlines were paying different fee for using the spaces allotted to them at IGI Airport. DIAL took a policy decision to uniformly increase the rate from April 01, 2015 so that the airlines were required to pay the same licence fee at the rate of INR 2615.72/sq/mtr. The same cannot be termed as arbitrary or unjust per se. The appeal has been dismissed accordingly.
(Source: Order dated April 12, 2016. For full text see COMPAT website)