OREANDA-NEWS. October 05, 2010. The Kaliningrad Office of the Federal Antimonopoly Service (OFAS Russia) found that “Russia” State Transport Company” Federal State Unitary Enterprise abused market dominance (in breach of Part 1 Article 10 of the Federal Law “On Protection of Competition”) on the market of passenger transportation on Kaliningrad – St Petersburg – Kaliningrad route, which infringed consumer interests, reported the press-centre of FAS Russia.

“The Kaliningrad Office of the Federal Antimonopoly Service started receiving complaints from citizens about overrated air fare to St Petersburg in March 2010”, says the Head of Kaliningrad OFAS Russia Irina Arefyeva. “OFAS promptly began analyzing competitive environment on the market of passenger transportation on Kaliningrad – St Petersburg – Kaliningrad route opened an investigation and established that “Russia” State Transport Company” Federal State Unitary Enterprise dominates the market of passenger transportation on Kaliningrad – St Petersburg – Kaliningrad route.

“In course of the antimonopoly investigation the OFAS Russia’s Commission established that in the period of increased demand, “Russia” cut down the number of the cheapest tickets from 38% of total number of tickets sold in February to 6% in June. At the same time the company increased the number of more expensive tickets from 1% to 16% accordingly. In May passenger traffic on this route increased by over 80% in comparison with January 2010. In June the increase was 104%!” added Ms. Arefyeva.

The air carrier was issued a determination to eliminate antimonopoly violations.

The determination specifies that “Russia” State Transport Company” Federal State Unitary Enterprise violated the law on protection of competition in “high” season and the interests of service consumers were infringed in that period. The company is requested not to exercise actions in breach of antimonopoly violations – do not reduce the number of the cheapest tickets, at the same time increasing the number of tickets to be sold under the most expensive tariff codes. “Our decision is socially important because it is made in the interests of citizens”, points out Irina Arefyeva. “It is especially important for the residents of the Kaliningrad region that flights are affordable regardless of the seasons”.

Kaliningrad OFAS Russia will also consider the issue of administrative liability of “Russia” State Transport Company” as an economic entity and the executive officer of the air carrier directly responsible for violating the law on protection of competition.

Reference:

Under Article 14.31 of the Code of the Russian Federation on Administrative Violations, punishments for antimonopoly violations for legal entities include fined from one hundredth to fifteen hundredths of the income of the violator from selling goods (services, works) on the market , where the violation is committed.

Executive officers who violated the Law can be fined from 20,000 Rubles to 50,000 Rubles, or can be disqualified for period of to three years.