CCP Recovers Penalty from PIA for Hajj Fare Hike

The Competition Commission of Pakistan (CCP) has successfully retrieved a long-pending penalty of Rs 10 million from Pakistan International Airlines (PIA). This penalty was initially levied in 2009 due to PIA’s abuse of its dominant market position by implementing substantial increases in Hajj fares back in 2008.

The imposition of the penalty followed an investigation initiated by the CCP, prompted by media reports alleging excessive Hajj fare charges by PIA. The investigation determined that the national airline had unjustifiably inflated Hajj fares by over 80%, specifically from Rs 38,500 to Rs 70,000 for travelers from the southern region, and from Rs 46,200 to Rs 85,000 for those from the northern region.

This action was deemed a breach of Section 3(3)(a) of the then-governing Competition Ordinance. Demonstrating a commitment to encourage adherence and ethical business conduct, the CCP applied leniency and imposed a nominal penalty of PKR 10 million.

PIA contested the CCP’s ruling in the Supreme Court of Pakistan, asserting that it had sustained losses on Hajj flights and was merely fulfilling its duties as the nation’s designated carrier. However, the Supreme Court directed the matter to the Competition Appellate Tribunal (CAT) for proper adjudication.

Following numerous hearings, the Tribunal dismissed the case because PIA’s legal counsel failed to appear. After the appeal period concluded, the CCP utilized its enforcement authority under Section 40(2)(a) of the Competition Act, 2010, to recover the owed penalty by seizing funds from the airline’s bank accounts.

The recovery signifies a notable enforcement action, highlighting the CCP’s ongoing dedication to ensuring accountability for entities engaging in anti-competitive behavior.