Air New Zealand has copped the second highest fine in the still ongoing price fixing case pursued by the Australian competition watchdog which it called a “global air cargo cartel” involving some 16 air cargo carriers.
Air New Zealand has been ordered to pay AUD 16 million (USD 11.8 million) by the Federal Court of Australia for its involvement in the price-fixing scheme, with the carrier also agreeing to pay AUD 2.0 million to cover the competition watchdog’s legal costs.
The Kiwi carrier’s penalty was the second largest fine out of the 14 airlines punished so far, with Qantas taking the biggest hit when it was fined AUD 20 million in 2008.
The airline was one of 15 airlines prosecuted after the Australian Competition and Consumer Commission (ACCC) took action against what it called a “global air cargo cartel” in 2006.
AAC commissioner Sarah Court said the court found Air New Zealand agreed with other airlines to fix the price of fuel and insurance on air freight services from Hong Kong and Singapore to various locations, including Australian airports, between 2002 and 2007.
Qantas, Singapore Airlines, Emirates, British Airways and Cathay Pacific, among others, were involved in the scheme, and have been penalised a total of AUD 113.5 million in court orders since 2008.
The ACCC’s case against Garuda and Air New Zealand was originally dismissed in 2014 as the court found the two airlines’ actions did not take place in an Australian market, therefore did not breach Australian law.
But a higher court upheld the ACCC’s appeal of the case in 2016, which saw the case referred back to the Federal Court.
Similar action has taken place involving these and other carriers in other international jurisdictions, including Canada, the European Union and the US where some airline executives were sentenced to jail terms.