Air NZ cops $15 million freight cartel fine
Air New Zealand will pay a $15 million fine for its part in what the Australian Competition and Consumer Commission ( ACCC) calls a global air cargo cartel.
The Federal Court found the airline had agreed with a number of 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 between 2002 and 2007.
ACCC commissioner Sarah Court says that this collusion had unfairly reduced competition for the transport cost of goods flown into 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.”
Since it launched its investigation into the cartel in 2006, penalties of $113.5 million have been imposed against 14 airlines, including freight airlines Cargolux and Martinair as well as Air France/KLM, Japan Airlines, Korean Air Lines, Malaysia Airlines, Emirates, Cathay Pacific, Singapore Airlines, Thai Airways and Garuda Indonesia.
The full bench of the Federal Court last year upheld the ACCC’s claim that the price-fixing conduct had taken place “in a market in Australia” – despite the fact they happened overseas, paving the way for the fines. In the end, the court ordered Air NZ to pay a pecuniary penalty of $11.5 million for price fixing in relation to fuel surcharges imposed for cargo from Hong Kong to Australia.
An additional $3.5 million penalty is payable for price fixing in relation to the insurance and security surcharge from Singapore to Australia.
Air NZ has also agreed to pay $ 2 million towards the ACCC’s legal costs, though the company says in an announcement to the New Zealand Exchange that the decision would have no impact on its earnings guidance of NZ$ 527 million for the 2017-18 financial year.