Air NZ cops $16m fine for price-fixing

Air New Zealand has been ordered to pay A$15 million (NZ$16 million) by the Federal Court of Australia for its involvement in a price-fixing scheme.

The airline was one of 15 airlines prosecuted after the Australian Competition and Consumer Commission (ACCC) took action against what it called a ‘‘global air cargo cartel’’ in 2006.

Commissioner Sarah Court said the court found Air New Zealand agreed with other airlines to fix the price of fuel and insurance on air-freight services from Hong Kong and Singapore to various locations, including Australian airports, between 2002 and 2007.

Airlines Qantas Airways, Emirates, British Airways and Cathay Pacific, among others, were involved in the scheme, and had been penalised a total of A$113.5m (NZ$123m) in court orders since 2008.

Court said the cartel of airlines ‘‘unfairly reduced competition for the transport cost for goods flown into Australia’’.

Air New Zealand also agreed to pay A$2m to cover the ACCC’s legal costs.

The airline’s penalty was the second largest fine out of the 14 airlines punished so far. Qantas was fined in 2008 and paid the largest fine of A$20m.

Justice Perram originally dismissed the ACCC’s case against Garuda Indonesia and Air New Zealand in 2014. It was found the airlines’ actions did not take place in an Australian market.

The Full Court upheld the ACCC’s appeal of the case in 2016 and it was referred back to the Federal Court.

Air New Zealand said the fine would not affect its earlier fullyear profit guidance. A spokeswoman said it was pleased the legal action had been resolved.

‘‘We have worked closely with the ACCC over the past year to reach this position, which is in line with previous settlements reached with other international airlines,’’ she said.