Price fixing in the airline industry

LPPThe Federal Court of Australia has dismissed an action commenced by the Australian Competition and Consumer Commission (ACCC) against Air New Zealand Ltd (Air NZ) and PT Garuda Indonesia Ltd (Garuda). The ACCC alleged that Air NZ and Garuda had in place arrangements or understandings with other international airlines between 2001 and 2006, and that those arrangements or understandings went to fix fuel, security and insurance surcharges on air cargo services. In other words Air NZ and Garuda were alleged to be part of a global cartel to fix such prices.

Air NZ and Garuda defended the action by claiming that although the surcharges did exist and interfered with competition in other countries (Hong Kong, Singapore and Indonesia) they did not exist in Australia. Justice Nye Perram agreed and held that the conduct did not take place in a ‘market in Australia’ as required by the Trade Practices Act 1974 (which has now been replaced by the Competition and Consumer Act 2010) and dismissed the action by the ACCC.

If you would like further information about this case, please contact Tony Greenwood – 02 9526 3444

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