Anti-Monopoly Service Finds Collusion Among Airlines

The Federal Anti-Monopoly Service has found evidence of price collusion between four Russian airlines: Aeroflot, UTair, S7 and Ural Airlines.

Although the airlines have different expenses and different networks, "from Irkutsk to Moscow and back they all offered practically the identical — maximum — ticket prices," the service said in a press release Thursday.

The alleged collusion lasted over a year, from the beginning of 2012 to January 2013.

The investigation began in Irkutsk in February, when customers complained that it was significantly more expensive to fly to Moscow from Irkutsk than it was to fly from Chita, Ulan-Ude or Krasnoyarsk, neighboring cities at comparable distances from the capital.

The price differential increased demand in the other cities, investigators found. Ural Airlines saw a 21 percent increase in passengers from Chita to Moscow in 2012, but only a 2 percent increase from Irkutsk.

A case was filed against the companies in June. The airlines must now dissolve any price-fixing agreements and provide confirmation of this to the authorities.

S7 and UTair have both denied the allegations, with a source inside S7 telling Kommersant that it is "absolutely incorrect" to compare the prices to different cities. He said the cost of a flight relies heavily on the costs of airport services and kerosene, which vary from region to region.

Scrutiny of airlines' price determination practices has increased in recent years. In 2011, the government successfully sued Aeroflot, UTair, and S7 for terminating sales on low-price tickets from Rostov-on-Don to Moscow.

The companies could be fined upward of 8 million rubles ($240,000), the expert said.