Is the Jet-Kingfisher code sharing deal anti-competitive?

The proposed code-sharing agreement between India’s two biggest private operators in the airline industry, Jet Airways and Kingfisher Airlines has come under the scrutiny of the Competition Commission of India (CCI) as a complaint has been filed with the competition watchdog saying the pact could lead to the formation of a cartel. The scope of the strategic alliance between Jet and Kingfisher, announced in October 2008, includes code-sharing on both domestic and international flights and joint fuel management in order to reduce expenses. Aviation analysts feel that costs for the airlines are at a peak, which has led to a serious dip in demand. This, coupled with the global financial crisis has also made the raising of capital almost impossible.

When two principal competitors come as collaborators, this can only be as a means to survive. If the situation was normal, this alliance could be called anti-competition, more so as both together have a market share of around 60%. But in the given circumstances this alliance is a need of the hour, a rescue plan to bring stability in the industry. However, experts at India’s regulatory body for competition law, the Competition Commission of India while airline alliances can shed costs, these can adversely impact competition in the markets. They reduce choice for the travelling public and increase tariffs. For this reason, airline alliances and mergers have been the subject of investigations by competition authorities.
For more on the same, please see: Business Standard article