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Air NZ Fined $15m For Price Fixing

Air New Zealand has been ordered by the federal court to pay $15m in fines after the airline was found illegally price fixing fuel and insurance surcharges on air freight services in the early 2000s.

The court found Air NZ made and gave effect to agreements with other airlines to fix the price of fuel and insurance surcharges on air freight services from Hong Kong, and insurance and security charges from Singapore, to various locations, including Australian airports, between 2002 and 2007.

The federal court ordered Air NZ to pay a pecuniary penalty of $11.5m for price fixing in relation to fuel surcharges imposed for cargo from Hong Kong to Australia. An additional $3.5m penalty is payable for price fixing in relation to the insurance and security surcharge from Singapore to Australia.

Sarah Court, ACCC commissioner says, “these illegal price fixing agreements unfairly reduced competition for the transport cost for goods flown into Australia.

“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.”

Since the ACCC first launched its investigation into the air cargo cartel in 2006, penalties totalling $113.5 million have been imposed against 14 airlines.

Air NZ has also agreed to pay $2 million towards the ACCC’s legal costs.

The penalty hearing against the 15th airline, PT Garuda Indonesia Ltd, was heard before Justice Perram this week.

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