The Australian Federal Court has ordered Air New Zealand to pay $A15m in penalties for its involvement in a freight price-fixing cartel.
The Australian Competition and Consumer Commission took legal action against the Kiwi carrier as part of wider action involving 15 international airlines that has seen penalties totaling $A113.5 million imposed against 14 of them.
Other competition regulators have also been taking action with fines against various airlines in Europe, the United States, Korea, New Zealand, Canada, and India.
The biggest penalty in Australia —$A20 million — was against home carrier Qantas. Air New Zealand now slots into second place ahead of Singapore Airlines ($A11.75m) and Cathay Pacific ($A11.25m).
The Court found Air NZ was involved in agreements to fix the price of fuel and insurance surcharges on air freight services from Hong Kong, and insurance and security charges from Singapore. This involved freight sent to various locations, including Australian airports, between 2002 and 2007.
It ordered the airline to pay a pecuniary penalty of $A11.5 million for the Hong Kong for price fixing in relation to the Hong fuel surcharges and an additional $A3.5 million for the Singapore insurance and security surcharge issue.
Air New Zealand also agreed to pay $A2 million towards the ACCC’s legal costs.
“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.”
Judgment on the last airline caught up in the ACCC’s crackdown, Garuda Indonesia, has been reserved.
Garuda and Air New Zealand both rejected the price-fixing allegations and took their cases as far as the Australian High Court but it last year unanimously dismissed their appeals.
Separately, Air New Zealand has also reached a settlement with US class action lawyers alleging collusion between 13 airlines on fares and fuel surcharges for flights from the US to Asia and Oceania from January, 2000.
AirNZ confirmed it reached a settlement of $US400,000 plus a $US250,000 contribution to class notice costs to avoid the substantial ongoing cost of litigation.
“Air New Zealand has consistently denied the allegations in the case,’’ it said. The claim, filed in 2007, has been strongly defended by Air New Zealand and the settlement is without any admission of liability.’’
The Kiwi carrier was one of four airlines to settle along with China Airlines, EVA Airways and Philippine Airlines. It joins eight others who have previously struck a deal.
All of the settling airlines deny the allegations, or that they have any liability, but have collectively agreed to pay $US49.9 million plus an additional $US750,000 to help pay some of the cost of notice and administration of the settlements.
Participants in the class action are expected to receive about $US8.50 per eligible ticket.
