Air New Zealand (Air NZ) has been penalised $15 million by an Australian Court for its part in a global air cargo cartel as part of an ongoing case by the Australian Consumer and Competition Commission involving 15 of the world’s leading airlines.
The latest case involved an illegal agreement by Air NZ with other airlines to fix the price of fuel and insurance surcharges on air freight services from Hong Kong, and insurance and security charges from Singapore, to various locations, including Australian airports, between 2002 and 2007.
The Federal Court ordered Air NZ pay a $11.5 million penalty for price fixing fuel surcharges, plus $3.5 million for price fixing insurance and security surcharges. Air NZ has also agreed to pay $2 million towards the ACCC’s legal costs.
The latest case is part of a 12-year battle against cartel behaviour in the air cargo industry by the competition regulator. Since the investigation began in 2006, penalties totalling $113.5 million have been imposed against 14 airlines, including Qantas, which paid $20 million in 2008, Emirates, British Airways, Singapore, Thai, Korean, Japan and Malaysian Airlines.
The ACCC’s case against Air NZ and Garuda was initially dismissed by the Federal Court in October 2014. The regulator’s appeal to the Full Court was upheld in March 2016, but the two airlines appealed to the High Court. That case was dismissed last year.
Following that decision, a penalty hearing against Garuda Indonesia was heard by the Federal Court this week and judgment has been reserved. It will be the 15th airline fined by an Australian court.
ACCC commissioner Sarah Court said the illegal price fixing agreements unfairly reduced competition for the transport costs for goods flown into Australia.
“Our efforts over the last decade and these significant penalties make clear the ACCC’s commitment to tackling cartels,” she said.
Competition regulators around the world have also taken action over the issue, resulting in fines against various airlines in Europe, the United States, Korea, New Zealand, Canada, and India.