OREANDA-NEWS. October 10, 2011. The Office of the Federal Antimonopoly Service in the Tyumen Region (Tyumen OFAS Russia) fined “UTair” Airlines” OJSC 2.5 million Rubles and “Yamal” Aviation Transportation Company” OJSC 2.6 million Rubles, reported the press-centre of FAS Russia.  

Investigating the documents related to tariff setting, Tyumen OFAS Russia discovered that in June – August 2010 “UTair” Airlines” OJSC and “Yamal” Aviation Transportation Company” OJSC fixed roughly equal basic fare for economy class on Tyumen – Sochi – Tyumen route – the difference in airfares was 90 Rubles.

OFAS also discovered that in 2008-2010 the above economic entities repeatedly exercised actions that resulted in fixing the same prices. The economic entities alternately raised prices and maintained them at a level formally different from the competitor's price with 90 Rubles difference.

Increasing prices meets the interests of each economic entity – the airfare in the analyzed period was mostly due to growing profitability. The market is divided into comparable shares. Such behavior may indicate absence of competitive relations and competition for consumers.

Tyumen OFAS Russia issued a determination to “UTair” Airlines” OJSC and “Yamal” Aviation Transportation Company” OJSC to stop the antimonopoly violations and exercise actions aimed at protecting competition.

“When the companies start competing with each other for customers it can result, in particular, to reduction of airfare, and the companies have possibilities for this”, commented the Head of Tyumen OFAS Russia, Mr. Igor Veretennikov.

Reference:

Part 1 Article 11 of the Federal Law “On Protection of Competition” prohibits agreements between economic entities or concerted actions on the market, if such agreements or concerted actions lead or can lead to increasing, reducing or maintaining prices at tenders or auctions.

As explained by the Plenum of the Supreme Arbitration Court of the Russian Federation in No.30 Findings of 30th June 2008, concerted actions can be established in the absence of documentary evidence of such arrangements. Conclusions about presence of one of the conditions that must be ascertained in order to establish the fact of concerted actions: each of economic entities knew about such actions in advance, - can be made based on factual circumstances of exercising such actions in the absence of objective reasons.

Under Part 1 Article 14.32 of the Code of the Russian Federation on Administrative Violations, if an economic entity concludes an agreement prohibited by the antimonopoly law of the Russian Federation, or participated in it, or if an economic entity is engaged in concerted actions prohibited by the antimonopoly law of the Russian Federation, it is punishable by an administrative fine upon legal persons – from one hundredth to fifteen hundredths of the income of the violator from selling goods (works, services) on the market where the administrative violation was committed, but no less than 100,000 Rubles.