Title : Air NZ fined $15 million as decade-long cartel case nears an end
link : Air NZ fined $15 million as decade-long cartel case nears an end
Air NZ fined $15 million as decade-long cartel case nears an end
It has taken more than a decade, but a $15 million fine against Air New Zealand has nearly delivered the Australian Competition and Consumer Commission a complete victory against global airlines which ran a price-fixing air cargo cartel.
Key points:
- Air New Zealand is the 14th of 15 cargo carriers pursued by the ACCC over price fixing allegations dating back to 2002
- Qantas has pair the biggest individual fine of $20m out of the $113.5m paid so far
- The allegations are part of a global cartel operating through Asian hubs and saw more around $1bn and jail time handed out in US
The Federal Court ruling against Air New Zealand takes the total penalties in the long-haul case to $113.5 million, with 14 of the 15 cases now settled.
Qantas still holds the dubious distinction of paying the heftiest penalty of $20 million back in 2008.
Qantas and British Airways were the first successful Australian prosecutions back in 2008.
Qantas was also hit by a $70 million fine in the US over the same allegations, as part of almost $1 billion in fines handed out to global carriers operating cargo businesses through major Asian hubs.
A former senior Qantas executive in charge of US freight operations received a six-month jail term and a $20,000 fine as part of the global investigation.
Longest action in Australian competition history
While it involved several separate cases, it is believed the action is the longest to have been run by the ACCC, or its predecessor the Trades Practices Commission.
While some carriers settled early in 2008 and 2009, the last case did not start until 2010.
Air New Zealand, along with Indonesia's Garuda, took a longer route than the others charged, having initially won their cases in the Federal Court in 2014, only to lose on appeal before the Full Court two years later.
The pair then lost an appeal in the High Court last year.
Garuda's day of reckoning is imminent after the Federal Court reserved its decision last week.
Garuda could end up with biggest fine
The ACCC has asked the court to fine Garuda between $20 million and $28 million to finally wrap up the affair.
Air NZ was ordered to pay $11.5 million for price fixing in relation to fuel surcharges imposed for cargo from Hong Kong to Australia.
An additional $3.5 million price-fixing penalty was handed out in relation to the insurance and security surcharge from Singapore to Australia.
Air NZ also agreed to pay $2 million of the ACCC's legal bills.
"These illegal price-fixing agreements unfairly reduced competition for the transport cost for goods flown into Australia," ACCC Commissioner Sarah Court said.
"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.
"Our efforts over the last decade and these significant penalties make clear the ACCC's commitment to tackling cartels."
One to go
| Carrier | Date of court order | Penalty |
|---|---|---|
| Qantas | December 2008 | $20m |
| British Airways | December 2008 | $5m |
| Air France & KLM | February 2009 | $6m |
| Cargolux | February 2009 | $5m |
| Martinair | February 2009 | $5m |
| Japan Airlines | April 2011 | $5.5m |
| Korean Airlines | November 2011 | $5.5m |
| Malaysian Airlines | May 2012 | $6m |
| Emirates | October 2012 | $10m |
| Cathay Pacific | December 2012 | $11.25m |
| Singapore | December 2012 | $11.75m |
| Thai Airways | December 2012 | $7.5m |
| Air NZ | June 2018 | $15m |
| Total | $113.5m |
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