CCP recovers Rs10m penalty from PIA

ISLAMABAD: The Competition Commission of Pakistan (CCP) has recovered a long-standing penalty of Rs 10 million from Pakistan International Airlines (PIA), originally imposed in 2009 for abusing its dominant position by excessively increasing Hajj fares in 2008.

The penalty was imposed after the CCP conducted an inquiry based on media reports alleging that PIA had charged exorbitant Hajj fares. The inquiry revealed that the national carrier had unreasonably increased Hajj fares by more than 80% — from Rs 38,500 to Rs 70,000 for the southern region, and from Rs 46,200 to Rs 85,000 for the northern region.

This conduct was found to be in violation of Section 3(3)(a) of the then Competition Ordinance. Taking a lenient view in line with its policy of encouraging compliance and good business practices, the CCP imposed a token penalty of PKR 10 million.

PIA challenged the CCP’s decision in the Supreme Court of Pakistan, arguing that it had incurred losses on Hajj flights and was only fulfilling its duties as a national carrier. The Supreme Court, however, referred the matter to the Competition Appellate Tribunal (CAT) as the appropriate forum for adjudication.

Following multiple hearings, the case was dismissed by the Tribunal due to non-appearance of PIA’s counsel. After the lapse of the appeal period, CCP exercised its enforcement powers under Section 40(2)(a) of the Competition Act, 2010, and recovered the penalty amount through attachment of the airline’s bank accounts.

The recovery marks a significant enforcement action and reflects CCP’s continued commitment to holding entities accountable for anti-competitive conduct.—SOHAIL SARFRAZ