air nz air nz
The competition regulator is challenging a decision to dismiss a lawsuit against Air New Zealand and Garuda Indonesia for allegedly fixing freight charges over a five-year period.
Following legal action by the Australian Competition and Consumer Commission, 13 airlines including Qantas, Emirates and British Airways were fined almost $100 million in Australia for their part in an illegal global freight cartel.
But Air New Zealand and Garuda contested the lawsuit against them for alleged price fixing.
The ACCC had alleged that the two airlines contravened consumer protection laws by fixing the level of a range of surcharges for air cargo services between 2001 and 2006.
The Federal Court did conclude in a judgment in October that a number of price-fixing arrangements alleged by the ACCC were established in Australia.
However, the court dismissed the legal action because the cartel conduct did not take place in a “market in Australia” in which the two airlines were competing.
ACCC chairman Rod Sims said the appeal was solely focused on the court’s ruling that there was no “market in Australia”, and reiterated that the watchdog would always pursue action against companies that engaged in cartel conduct which harmed Australian businesses and consumers.
“For this reason, it is important that we seek clarity on whether the [Competition and Consumer] Act applies to the collusive arrangements identified by the court,” he said.
When the lawsuit was dismissed, Air New Zealand said the decision was important in aviation because international carriers needed clarity about the legal boundaries of the markets in which they operated.
The case against Air New Zealand and Garuda has been running since 2010.
The biggest scalp from the competition regulator’s investigation and subsequent legal pursuit of a long list of airlines has been Qantas, which was fined $20 million in 2008.
The amount of fines Qantas has copped worldwide totalled more than $105 million, which included $US61 million in the US in 2007 after it pleaded guilty to fixing air-cargo rates.
The global cartel originated in 1996, when at least 17 airlines introduced freight levies on air cargo to counter rising jet fuel costs.