OREANDA-NEWS. August 16, 2013. The Office of the Federal Antimonopoly Service in the Irkutsk region (Irkutsk OFAS Russia) completed an investigation of four air carriers on the “Irkutsk – Moscow – Irkutsk” route. The antimonopoly body exposed price collusion in arrangements between the airlines (Clause 1 Part 1 Article 11 of the Federal Law “On Protection of Competition”).

OFAS pronounced that “Aeroflot” OJSC, “UTair” OJSC, “Siberia” Airlines” and “Urals Airlines” OJSC breached the antimonopoly law. Passengers, unhappy that it was much more expensive to fly to Moscow from Irkutsk than from Chita, Ulan-Ude or Krasnoyarsk, complained to OFAS about the air carriers.

The agreement between the airlines that resulted in fixing and maintaining prices (the airfares for the “Irkutsk – Moscow – Irkutsk” route) was in effect in January-December 2012 and in January 2013. An investigation started in February and in June 2013 Irkutsk OFAS Russia initiated a case against the air carriers.

In the course of the investigation the antimonopoly body studied a considerable number of price plans of the airlines and took into account data on the costs of fuel-and-lubrication materials, fuelling services and ground handling, including data provided by the offices of the Antimonopoly Service from the neighbouring regions.

Experts concluded that although the airlines had different costs and route networks, they offered practically identical – the highest – airfares for the “Irkutsk – Moscow – Irkutsk” route. Other routes of the same carriers have significant difference in fares.

As a result, demand for passenger flights to Moscow shifted from Irkutsk to Ulan-Ude and other regions. For instance, the passenger flow of “Siberia” Airlines” to Moscow increased from Irkutsk only by 10% while flight from Ulan-Ude, the capital city of Buryatia, increased by up to 15%. “Urals Airlines” transport only 2% more passengers from Irkutsk to Moscow, in contrast to increase by 21% from Chita.

“Synchronizing pricing policy on Irkutsk-Moscow routes strongly limits the freedom of movement of our fellow countrymen and allows the airlines to “forget that they must compete with each other”. OFAS sent determinations to the airlines to stop operating the price agreement and submit evidence to the antimonopoly body that the violation is eliminated. The air carriers will be also fined, but this is the new procedural stage of the case”, said the Head of Irkutsk OFAS Russia, Valentina Zamorina.