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Court agrees with ACCC that Garuda and Air New Zealand broke Australian cartel laws

Chung Sung-Jun/Getty Images

Garuda and Air New Zealand, the last two of 15 airlines accused of fixing air cargo prices, have now been found to have contravened cartel laws.

Airlines that already settled the case — 13 of them — have been fined a combined $98.5 million. Among them, Qantas was ordered to pay $20 million, Singapore Airlines $11.75 million and Cathay Pacific $11.25 million.

The Federal Court today upheld an appeal by competition watchdog the ACCC (Australian Competition and Consumer Commission) against a ruling that Garuda and Air New Zealand couldn’t be found to have fixed prices because this took place outside Australia.

“The air cargo case is a very significant one for the ACCC, as it involved a substantial number of airlines engaging in price fixing conduct around the world,” says ACCC chairman Rod Sims.

“Although it is no longer a requirement of our cartel laws that it be established that price fixing occurred in a market in Australia, this decision is significant because it confirms the ACCC’s view that the conduct by the airlines in fixing air cargo surcharges to be paid by Australian importers and ultimately passed on to Australian consumers, were caught by Australian competition laws.”

The ACCC took action against 15 international airlines. Thirteen settled and the Federal Court handed out fines.

In 2014, the court dismissed the ACCC’s proceedings against Garuda and Air New Zealand on the basis that the conduct did not occur in a “market in Australia”. The ACCC appealed to the full bench of the Federal Court.

Today it found that price fixing by Garuda and Air New Zealand Ltd took place in a “market in Australia” and thus breached Australia’s price fixing laws.

The court has yet to determine the fines resulting from the finding.

Here are the penalties imposed so far:

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