Competition Commission Probes Hyderabad Airport Operator For Unfair Practices
Competition Commission of India has ordered a detailed probe against Hyderabad international airport operator GMR Hyderabad International Airport Ltd. for alleged abuse of dominant position and denial of market access to a leading Maintenance, Repair and Overhaul services provider.
The order against GHIAL has come on a complaint filed with the watchdog by Air Works India (Engineering) Pvt Ltd. Air Works is into providing maintenance, repair and overhaul (MRO) services of aircraft to airlines and general aviation.
"The facts of the present case prima facie suggest denial of market access to the informant coupled with exclusionary motive by GMR to favour its own group entity (i.e. GAT). Owing to its dominance in the upstream market and its presence in the downstream market, GMR seems to have distorted the level playing field," the regulator said in a 21-page order.
The complaint was filed against GHIAL and GMR Aero Technic Ltd., a wholly-owned subsidiary of GMR Aerospace Engineering Ltd. The latter is a wholly-owned subsidiary of GMR.
It was alleged that GMR owing to its sole control over the Hyderabad airport premises has denied access to Air Works for providing the Line Maintenance Services with an intent to give advantage to GAT at the aerodrome.
Line Maintenance Services can include activities like trouble shooting, defect rectification, component replacement, schedule maintenance and/or checks, minor repairs and modifications and visual inspections. Such service is required to be provided during the time between the landing and take-off of any aircraft to declare it airworthy and make it fit for departure.
To assess the complaint, Competition Commission of India considered the markets for 'provision of access to airport facilities/ premises' and 'provision of Line Maintenance Services' at the Rajiv Gandhi International Airport. Hyderabad aerodrome is known as RGIA.
The watchdog noted that the alleged conduct by GHIAL has the potential to limit and restrict the provision of Line Maintenance Services and the technical development relating to provisioning of such services to the prejudice of consumers within certain provisions of the Competition Act.
"The Commission is of the considered view that prima facie a contravention with regard to Section 4(2)(b), Section 4(2)(c) and Section 4(2)(e) of the Act is made out against GMR," the order, dated Oct. 3, said.
Section 4(2)(c) pertains to limiting and restricting provision of services that adversely impacts competition in the relevant market. Section 4(2)(c) relates to denial of market access while Section 4(2)(e) is about leveraging of dominant position in the upstream market to protect the downstream market.
According to the order, since GMR is the major shareholder of GHIAL, it has been used synonymously with the latter for the purposes of analysing the case.