OREANDA-NEWS. July 23, 2013. The 15th Arbitration Appeal Court upheld the decision of the Office of the Federal Antimonopoly Service in the Rostov region (Rostov OFAS Russia) that “Aeroflot”, “S7” and “UTair” violated the antimonopoly law. Earlier Rostov Regional Arbitration Court arrived to the same conclusion. The total fines for the violation exceed 8 million Rubles.

Rostov OFAS Russia found that “Aeroflot” OJSC, “Siberia Airlines” OJSC and “UTair” Airlines” OJSC violated Clause 4 Part 1 Article 10 of the Federal Law “On Protection of Competition”. The air carriers unreasonably stopped offering the cheapest economy air fares for passenger transportation between Moscow and Rostov-on-Don.

Rostov OFAS Russia received complains from passengers that in December 2011 the carriers had unreasonably increased air fares for flights between Moscow and Rostov-on-Don. According to the petitioners, the increased prices were related to decreased competition on the air transportation markets due to bankruptcies of the low-cost air carriers: “Avianova” Ltd. and “SkyExpress” CJSC.

Investigating the petitions, OFAS revealed that in January – September 2011 around 25% of the passenger flow were served by other air carriers including “Avianova” Ltd., “SkyExpress” CJSC and “Continent” Airlines” OJSC that stopped flying in October 2011. Exit of the companies from the market resulted that over 90% of the market were controlled by three air carriers: “Aeroflot” OJSC, “Siberia Airlines” OJSC and “UTair” Airlines” OJSC.

Analysis of sale trends under each fare showed considerable changes in the pricing policy of each air carrier. The sale of the cheapest tickets (around 3000 with fuel charges and VAT) reduced by more than twofold, while sale of more expensive tickets (around 6000 with fuel charges and VAT) increased also twofold.

Thus, in breach of the antimonopoly law “Aeroflot” OJSC, “Siberia Airlines” OJSC and “UTair” Airlines” OJSC cut on the cheapest category of economy air fare for passenger transportation between Moscow and Rostov-on-Don without economic justification, in spite of demand for such fares.

Having investigated the case, Rostov OFAS Russia issued determinations to “Aeroflot” OJSC, “Siberia Airlines” OJSC and “UTair” Airlines” OJSC to eliminate the violations of the antimonopoly law.