Haj fare hike: CCP imposes Rs 10 million token penalty on PIA

[LahoreEstate]

ISLAMABAD (November 21 2009): A two-member bench of the Competition Commission of Pakistan (CCP) has imposed a token penalty of Rs 10 million on Pakistan International Airlines (PIA) for allegedly abusing its dominant position by "excessively increasing" Haj fares in 2008. The CCP on Friday issued an order against the national flag carrier.

The bench comprising Ms Maleeha Mimi Bangash and Dr Joseph Wilson, members of the Commission, in its decision ordered PIA to make refunds, within two months from the date of this order, to its passengers who performed a short duration Haj in 2008, calculating the refund on the basis of fares charged by other airlines on similar or equivalent routes, the past fare increases by airline and other relevant facts and figures. The national flag carrier shall also work out a mechanism to identify such Hajis and ensure that refund is made to all of them, the order said.

The CCP had taken notice of media reports that the airline was charging exorbitant Haj fares and conducted an inquiry which proved that PIA had unreasonably increased Haj fares by more than 80 percent from Rs 38,500 to Rs 70,000 for South Region and from Rs 46,200 to Rs 85,000 for North Region as compared to Haj fares in preceding years (2006 and 2007) thereby attracting violation of Section 3(3)(a) of the Ordinance.

Pursuant to the inquiry report a showcause notice was issued to PIA on May 5, 2009 and two hearings were held in June and September 2009. Taking a lenient view in line with its stance of promoting good business practices in the market, the CCP has imposed the token penalty on the airline, the Commission added.-PR

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