The Commission is correct in using the origin and destination (O and D) principle to define the rele

Jet-Etihad: CCI must learn better research Delhi high court advocate Sudipto Sircar argues that the Competition Commission of India s (CCI) surprisingly deficient market research before approving the Jet-Etihad combination on 11 December, has put an otherwise desirable investment into jeopardy by exposing consolidated container the combination to inevitable litigation.
The Jet Airways Etihad Airways investment proposal is by far one of the biggest as well as the most complex Combination Proposal which the Competition Commission of India (CCI) has had to handle till date.
There is no doubt that whatever may be the compliments or the criticisms which the Commission has received (and there have been plenty of both, not to mention the first ever appeal to the Competition Appellate consolidated container Tribunal (CAT) against a combination order!), the much needed experience and insight which the Commission has gained and will gain as its order now enters the corridors of litigation in assessing this transaction, will aid in its growth and better understanding of the aviation market and combination assessment in general in the future.
The emphasis of the author in this article is therefore not directly on the issue on the merits of the case (i.e., whether the Combination consolidated container should have or should have not been approved) but on the ambiguities and vacuities which are prevalent in the majority order of the Commission. The author has on earlier occasions also criticised past orders consolidated container of the CCI on these grounds, and continues to do so against the above mentioned order as well.
The most important document of all the above is the commercial cooperation agreement (CCA), which, inter alia , created the following obligations between the parties: The parties would frame co-operative procedure in relation to (i) joint route and schedule coordination; (ii) joint pricing; (iii) joint marketing, distribution, sales representation consolidated container and cooperation; (iv) joint/reciprocal airport representation and handling; consolidated container (v) joint/reciprocal technical handling and belly-hold cargo and dedicated freight capacity on services (into and out of Abu Dhabi and India and beyond); The parties would aim to establish centres of excellence either in India or Abu Dhabi; Etihad Airways would recommend candidates for the senior management of Jet; Jet Airways would use Abu Dhabi as its exclusive hub for scheduled services to and from Africa, North and South America and UAE; Jet would refrain from entering into any code sharing agreement with any other airline that has the effect of: (i) bypassing consolidated container Abu Dhabi as the hub for traffic to and from the above said locations, or (ii) is detrimental to the co-operation contemplated by the CCA.
At this juncture, the issue on the execution of agreements with potentially anti-competitive effects before receiving a formal approval from the Commission, consolidated container which is regarding the agreements entered between the parties into on 26.02.2013 for the sale of three landing/take-off slots at the London Heathrow Airport by Jet Airways to Etihad Airways and the pursuant lease back of the same slots back to Jet Airways (collectively called the LHR Transaction ) has already been taken cognisance of by the CCI and it suffices to say, the Commission has recently by its order dated 19 December 2013 imposed consolidated container a penalty of Rs 1 crore for consummating parts of the deal without approval of the CCI .
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The Commission is correct in using the origin and destination (O and D) principle to define the relevant market for the purpose of the transaction. According consolidated container to this principle, every combination of a point of origin and a point of destination is considered to be a separate market from the consumer s viewpoint. In other words, it is correct to identify all the routes between India and Abu-Dhabi as the relevant market consolidated container to be taken into consideration to determine any prospective anti-competitiveness. It is also correct to conduct a separate analysis for each and every route, both direct and indirect, from any airport in India to the Abu-Dhabi hub. In other words, the essence or the trajectory of the Commissions reasoning is correct. It is after this take-off consolidated container that the Commission begins to fly into pockets of turbulence. Over emphasis on airport substitutability
33. In arriving at the relevant market definition the Commission made a distinction between different groups consolidated container of passengers and observed that Indian passengers on the 9 direct overlapping O&D pairs are generally more price sensitive and less time sensitive. Moreover, consolidated container passengers living in the catchment areas o