In what can best be described as another round in the International Air Transport Association (IATA) versus Air Cargo Agents Association of India (ACAAI) battle, India’s Competition Commission (CCI) recently dismissed allegations of unfair business practices made against ACAAI and its office bearers with regard to implementation of Cargo Accounts Settlement System (CASS).

The Case & Verdict

      IATA filed the complaint alleging ACAAI and its office bearers had colluded and were collectively boycotting business with those carriers that were keen to implement the web-based online billing and settlement system, CASS, in India.
      CCI rebuffed the complaint, saying that IATA “has failed to furnish any material that could prima facie suggest an agreement” amongst the opposite parties. In its order dated September 12, CCI said that no prima facie case of contravention of the provisions of Section 3 of the Act was made out against ACAAI and its office bearers.
      CCI noted that IATA has itself admitted that there was an overwhelming response from member agents of ACAAI in support of introduction of CASS, and various cargo agents came forward voluntarily to get their enrollment done for the training program.
      In fact, IATA also mentioned that after the introduction of CASS on June 1, 2015, there had been a phenomenal increase in the number of participating cargo agents, with more airlines and agents actively participating in CASS of their own volition, CCI said.
      “It is also an admitted fact that 14 airlines and more than 416 agents have received training to work on the CASS program.
      “All this activity indicates that there is no collective boycott on the part of member agents of ACAAI and the member agents are taking independent commercial decision to participate/not to participate in the CASS program,” the Competition Commission of India (CCI) said.

Back To Beginnings

      The Air Cargo Agents Association of India (ACAAI) filed a complaint with the Competition Commission of India (CCI) back in December 2012 against the “anti- competitive activities of International Air Transport Association (IATA) in India.” The CCI sent the case for investigation to the office of the Director General Investigation (DG).
      After receiving the DG’s investigation report, CCI issued its order in June 2015.

ACAAI Sends Out An Appeal

      In June 2015 ACAAI was not satisfied by the CCI’s order claiming it was wrong on facts as well as law.
      The Association also pointed out that the CCI had not paid heed to the issues it had raised.
      Left with no other option, in August 2015, ACAAI appealed to the Competition Appellate Tribunal (COMPAT) against the CCI order.
      Incidentally, COMPAT is no longer in existence and was replaced by the NCLAT in May 2017.
      In November 2015, COMPAT gave its decision, setting aside the CCI order.
      The DG, COMPAT mentioned, had indeed committed serious procedural errors in not going through the due process to investigate ACAAI’s allegations that IATA had taken advantage of its dominant position and had consequently violated Sections 3 and 4 of the Competition Act by IATA.
      According to ACAAI, “the COMPAT inter alia stated in its order after detailed analysis of the submissions made by both sides that the Commission had failed to take cognizance of all ACAAI’s issues.”
      COMPAT then asked the DG to start investigations, again keeping in view all the issues mentioned by ACAAI in its first complaint that had “formed part of the information before the CCI.”
      The investigations are still ongoing.

IATA Well-Calculated Strategy

      IATA filed a new complaint with the CCI against ACAAI on June 7, 2017.
      ACAAI sources termed the filing of the IATA complaint “a well calculated strategy” on the part of the IATA.

Trumped Up Charges

      ACAAI sources pointed out that IATA attempted to make untenable allegations to the effect that ACAAI was in violation of the provisions of the Competition Act by compelling its members not to sign up for the Cargo Accounts Settlement System (CASS) program IATA has been seeking to enforce in India.
      This allegation was considered on merit by the CCI and the CCI rejected the charge by passing a final order under Section 26 (2) of the Competition Act.

Long Festering Issues

      The problems between IATA and ACAAI—or rather the ACAAI members—have been continuing for a long time and include the implementation of CASS.
      Back on December 21, 2012, ACAAI wrote its first formal petition to the CCI against IATA. It mentioned that “the existing functioning and the modalities of IATA in India could amount to a complex phenomena of cartelization both on ‘micro’ and ‘macro’ economic operational processes and hence, could be in violation of Section 3 and 4 of the Competition Act, 2002.”

Count Us Out As Collaborators

      ACAAI also stated that it did not want to find itself in a situation where, if IATA were found to be indulging in any anti-competitive practice in India, ACAAI would be construed as an unwitting collaborator acting in concert with such practices, whether voluntarily or otherwise. ACAAI’s position was that the CCI was required to examine the facts that unilaterally determined the polices that governed air cargo agents, prescribe the qualification and conditions for the accreditation and retention of air cargo agents, act in a self-acclaimed regulatory capacity, determine the commission (or its exclusion, for example, in recovering fuel surcharge on behalf of the airlines) payable to agents, determine norms for air cargo agents and also determine if IATA’s functions amounted to macro-economic cartelization.

Following The Money

      It was further pointed out that determination of financial criteria, penalty for non-compliance, and exclusion of fuel surcharge from payment of commission to agents as set out which prejudicially affected the air cargo agents so far, would amount to micro-economic cartelization.
      ACAAI also found at that time that IATA and IATA India were all set to introduce and implement a new CASS in India.
      It was the concern of ACAAI that the implementation of CASS would be prejudicial to the air cargo agents and ought to be stayed until the conclusion of the director general’s investigation.
      Unfortunately, CCI had then observed CASS to be only a modern technologically-derived accounting system, and the same was declared to be a pilot project by IATA where there was no compulsion for the agents to join CASS.
(To Be Continued)
Tirthankar Ghosh

      More than fifty United Cargo employees and partners ran, swam, and biked through the streets of Tempe, Arizona, in the recent Life Time Tri Tempe Triathlon. Contributions made in the name of the Cargo team’s triathletes raised more than $70,000 for Save the Children, a charity that provides critical care and supplies to at-risk children in communities affected by natural disasters.
      The annual triathlon has become a team-building tradition,” said United Cargo President Jan Krems. “It’s always enjoyable to bring our teammates together from all over the world to become healthier. But helping the most vulnerable victims of recent hurricanes—the children—was never far from our minds.
      “Our aim is always to raise one dollar more than the year before, so exceeding 2016’s total by over $20,000 was the highlight of the effort. We’ve already set our goal to get more team members involved and raise more than $100,000 for the kids in 2018.”

Raising money to help others whilst powering his racer in the United Cargo Triathlon, or raising cargo to even greater heights, how fast is United’s Jim Bellinder? Click here.

RE:  Flight Of Fancy With Ms. Lillian

Dear Geoffrey,

    Belated best wishes for your recent birthday, here is wishing you many more!
    Loved the piece on Hemingway by Miss Lillian from the New Yorker in the latest issue of FT
    You have excellent taste, but that's not news.
    One of the many pleasures of being retired is having the time to read such nice long, beautifully written and interesting articles

Very best regards,
Peter George

Dear Geoffrey, Sabiha

    Greetings from Mumbai.
    It was pleasure meeting both of you at the FIATA Congress held in Kuala Lumpur.
    I appreciate and admire the frank and open approach you have in reporting.
    Of course your seniority and maturity puts you head and shoulder above others and rarely do I see reporters who feel they are morally obliged to let the world know the truth.
    Look forward to remaining in touch.

Best Personal Regards,
Sam N. Katgara
Partner, Jeena Founded 1902

Vol. 16 No. 81
Babar of Pakistan Leads FIATA To India
Chuckles for October 10, 2017
October Event Like Silk In Baku
Hurricane Relief Continues