CCP recovers penalty from PIA for abusing dominant position

The Competition Commission of Pakistan (CCP) has successfully recovered a long-standing penalty of PKR 10 million from Pakistan International Airlines (PIA).

The fine was originally imposed in 2009 after PIA was found to have abused its dominant position by excessively increasing Haj fares in 2008.

The penalty followed a CCP inquiry initiated in response to media reports alleging that PIA had charged exorbitant Haj fares. The investigation revealed that the national carrier had unreasonably increased fares by more than 80%—from Rs38,500 to Rs70,000 for the southern region and from Rs46,200 to Rs85,000 for the northern region.

This conduct was deemed a violation of Section 3(3)(a) of the then Competition Ordinance. In line with its policy of promoting compliance and ethical business practices, the CCP imposed a token penalty of PKR 10 million.

PIA challenged the CCP’s decision in the Supreme Court of Pakistan, arguing that it had incurred losses on Haj flights and was merely fulfilling its duties as a national carrier. However, the Supreme Court referred the matter to the Competition Appellate Tribunal (CAT) as the appropriate forum for adjudication.

Following multiple hearings, the Tribunal eventually dismissed the case due to the non-appearance of PIA’s counsel. After the appeal period expired, CCP exercised its enforcement powers under Section 40(2)(a) of the Competition Act, 2010, recovering the penalty amount through the attachment of the airline’s bank accounts.