Pakistan International Airlines (PIA) has been recovered by the Competition Commission of Pakistan (CCP) from a long-standing penalty of Rs. 10 million, which was first levied in 2009 for abusing its dominant position by exaggerating Hajj fares in 2008.
The fine was applied following an investigation by the CCP into claims made in the media that PIA had billed excessive Hajj fees. The national carrier had unjustly raised Hajj fares by almost 80 percent, from Rs. 46,200 to Rs. 85,000 for the northern region and from Rs. 38,500 to Rs. 70,000 for the southern region, according to the investigation.
It was determined that this behavior violated Section 3(3)(a) of the Competition Ordinance in effect at the time. The CCP assessed a nominal penalty of Rs. 10 million, adopting a liberal stance consistent with its aim of promoting compliance and ethical business practices.
PIA challenged the CCP’s decision in the Supreme Court of Pakistan, arguing that it had lost money on Hajj flights and was only fulfilling its obligations as a national carrier. However, the Supreme Court sent the case to the Competition Appellate Tribunal (CAT) as the appropriate adjudication body.
After several hearings, the Tribunal dismissed the matter since PIA’s attorney failed to show up. Following the expiration of the appeal period, CCP used its enforcement authority under Section 40(2)(a) of the Competition Act, 2010 to attach the airline’s bank accounts in order to recover the penalty sum.
The recovery is a noteworthy enforcement action that demonstrates CCP’s ongoing resolve to hold companies responsible for anti-competitive behavior.
