ISLAMABAD – Competition Commission of Pakistan (CCP) has recovered Rs1 Crore penalty from Pakistan International Airlines (PIA) after long-standing case involving airline’s excessive Haj fares in 2008.
The penalty was the result of an inquiry initiated by media reports accusing national carrier of charging unreasonably high fares for Haj flights. The inquiry revealed that the airline had raised fares by more than 80pc, with prices increasing 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.
CCP found that PIA’s actions violated the Competition Ordinance of the time and imposed a token penalty of Rs 10 million to encourage compliance with fair business practices. However, PIA challenged the decision in the Supreme Court, arguing that the airline was fulfilling its duties as the national carrier and had incurred losses on Haj flights.
Supreme Court referred the matter to the Competition Appellate Tribunal (CAT), which dismissed the case due to the absence of PIA’s counsel. After the expiration of the appeal period, the CCP used its enforcement powers under the Competition Act, 2010, to recover the penalty by attaching funds from PIA’s bank accounts.
This recovery comes on the heels of the Pakistani government’s efforts to sell a controlling stake in PIA, with the aim of raising funds and restructuring the cash-strapped national carrier. The government has announced plans to seek expressions of interest (EOI) for the sale of a 51-100% stake in PIA next week, as part of broader efforts to reform state-owned enterprises under the terms of a $7 billion IMF program.
The government’s previous attempt to privatize PIA last year ended in failure after only one bid was received, which fell significantly short of the asking price of over $300 million.
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