Air NZ cops $15 mil­lion freight car­tel fine

Australian Transport News - - News -

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.

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