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Aviation stocks end mixed after CCI penalty; Jet down 3%, SpiceJet, InterGlobe gain

Shares of InterGlobe Aviation fell for the first time since its listing, but quickly recovered to hit its intraday high of Rs 1059.20, up 2.32 per cent.

BT Online | November 18, 2015 | Updated 16:36 IST
SpiceJet, Jet Airways and IndiGo cut losses; CCI fines airlines for cartelisation
Jet Airways, however, continued to trade in red and slipped as much as 4.29 per cent to Rs 410.25. Photo: Reuters

Shares of SpiceJet and Interglobe Aviation rallied up to 13 per cent, but Jet Airways fell 4 per cent after the airlines said they would pursue legal steps against CCI order imposing penalties totalling Rs 258 crore on them for anti-competitive practices related to air cargo.

Stock of SpiceJet ended 9.48 per cent up after rising as much as 13.33 per cent to hit their fresh 52-week high at Rs 54.40 on Bombay Stock Exchange (BSE). The stock had fallen 3.64 per cent in the morning trade.

Shares of InterGlobe Aviation closed nearly 1 per cent up after hitting its intraday high of Rs 1059.20, up 2.32 per cent. The scrip briefly slipped in red in the early trade.

Jet Airways, however, settled the day 2.95 per cent down after falling as much as 4.29 per cent to Rs 410.25.  

While a penalty of Rs 151.69 crore has been imposed on Jet Airways, the fines slapped on InterGlobe and SpiceJet are Rs 63.74 crore and Rs 42.48 crore, respectively.

InterGlobe Aviation operates no-frills carrier IndiGo.

"Jet Airways is not in contravention of the provisions of the Competition Act and it shall pursue all available legal steps to defend its position," a Jet Airways spokesperson said about the Competition Commission of India (CCI) order.

SpiceJet's Corporate Affairs General Manager Ajay Jasra said, "We are examining the order. We are likely to challenge this verdict".

These carriers have also been directed to cease and desist from indulging in anti-competitive practices.

The ruling has come on a complaint filed by Express Industry Council of India, which alleged that the five airlines indulged in anti-competitive practices. The grouping said the latest CCI order would deter entities from indulging in unfair business practices.

CCI said the three carriers colluded in fixing FSC rates.

Such conduct was found to have resulted in indirectly determining the rates of air cargo transport and thereby contravening Section 3 of the Competition Act. This section pertains to anti-competitive agreements, the release said.

"No penalty, however, was imposed upon Air India Ltd as its conduct was not found to be parallel with other airlines.

"Similarly, no penalty was imposed upon Go Airlines (India) Ltd as it gave its cargo belly space to third party vendors with no control on any part of commercial/economic aspects of cargo operations done by vendors including imposition of FSC," the release said.

(With inputs from PTI)

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