ACCC appeals Air NZ, PT Garuda win in Australian cartel case

Wednesday 17th December 2014

The Australian Competition and Consumer Commission is appealing an Australian Federal Court ruling clearing carriers Air New Zealand and PT Garuda Indonesia of fixing prices for international air freight services.

The competition regulator's appeal is focusing solely on the court's finding that the activities did not occur in the Australian market, it said in a statement. In October, Justice Nye Perram dismissed the ACCC's claim against the airlines, which were the only two to defend the action, accepting their defence that the surcharges interfered with competition in markets in Hong Kong, Singapore and Indonesia, but not in Australia.

"The trial judge concluded that although a number of price fixing arrangements alleged by the ACCC were established which may have had an effect on prices in Australia, the cartel conduct did not take place in a 'market in Australia' in which the airlines were competing, as was required by the act at the time," the regulator said.

The alleged price fixing has been the subject of anti-trust process worldwide, with big settlements from multi-national airlines in Europe and the US. Some of the alleged agreements appear to have been in place since 2001.

The judge said the commission didn't demonstrate Air New Zealand was involved in collusive practices over fuel surcharges calculated with reference to cargo weight in Singapore. However, the judge found the company did engage in fixing prices on an insurance and security surcharge put in place in response to the September 2001 terror attack in New York.

PT Garuda was claimed to have engaged in fixing fuel surcharges in Indonesia, which the judge accepted was the case.

Earlier this year Air New Zealand was awarded $3.2 million in legal costs as part of a class suit settled by other airlines in Australia.

The New Zealand airline is still defending a class action in the US, which is its last remaining litigation relating to the alleged air cargo cartel.

Shares of Air NZ were unchanged at $2.50, and have gained 60 percent this year.

BusinessDesk.co.nz

Comments from our readers

No comments yet