The merger of Air India and Indian may have been cleared for take-off, but whether the combined entity would continue to enjoy monopoly over the lucrative Middle-East sector has become a matter of scrutiny by the country's competition commission.
The commission, which is at present playing more of an advisory role pending passage of an amendment bill granting it more powers, could force open this market for private players, sources said on Thursday.
"The merger of Indian and Air India may require intervention of the competition commission, which is planning to take up the issue with the Ministry of Civil Aviation," a source said.
When private players were allowed to start operations on the international routes, the government did not open the money making Middle East sector for the two airlines it owns.
As per the Competition Act, no merger should create entry barriers for competition. The competition commission has taken a view that the present the limited competition between the Indian and Air India would cease after their merger.
"This situation is not allowed according to the law," the source said. The Competition Act, which had run in to problems because of litigation, is likely to amended in the coming session as the Standing Committee has already cleared the amendments. This would happen at the same time the merger takes place.
