Air New Zealand hit with A$15m fine for cargo cartel role
28 / 06 / 2018
Air New Zealand (Air NZ) has been ordered to pay A$15m in fines by an Australian Federal Court for its role in the air cargo cartel.
The court found that Air NZ agreed with other airlines to fix the price of fuel and insurance surcharges on airfreight services from Hong Kong, and insurance and security charges from Singapore, to various locations, including Australian airports, between 2002 and 2007.
“These illegal price fixing agreements unfairly reduced competition for the transport cost for goods flown into Australia,” Australian Competition and Consumer Commission (ACCC) commissioner Sarah Court said.
The Court ordered Air NZ to pay a pecuniary penalty of A$11.5m for price fixing in relation to fuel surcharges imposed for cargo from Hong Kong to Australia.
An additional $3.5m penalty is payable for price fixing in relation to the insurance and security surcharge from Singapore to Australia.
“This decision sends a strong warning to overseas and domestic operators that the ACCC can and will continue to defend competition and the rights of Australian customers and businesses by taking action against anti-competitive conduct,” Court added.
Since the ACCC first launched its investigation into the air cargo cartel in 2006, penalties totalling A$113.5m have been imposed against 14 airlines.
Air NZ has also agreed to pay A$2m towards the ACCC’s legal costs.
The penalty hearing against the 15th airline, PT Garuda Indonesia Ltd, was heard before Justice Perram this week. Judgment in that matter has been reserved.
Competition regulators around the world have taken action in relation to the air cargo cartel, with fines or penalties ordered against various airlines in Europe, the US, Korea, New Zealand, Canada, and India.
The ACCC commenced legal action against 15 international airlines between 2008 and 2010.
The ruling, on airline agreements in place between 2002 and 2006, is the latest legal twist in an action started seven years ago by the (ACCC).
In October 2014 the Federal Court dismissed the ACCC’s case against Air NZ and Garuda. The ACCC appealed the decision to the Full Court of the Federal Court, which upheld the ACCC’s appeal in March 2016.
Air NZ and Garuda appealed the decision to the High Court, which last year dismissed the appeals.
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