Air New Zealand and Indonesias National Airline

Air New Zealand and Indonesias National Airline

In a cartel case Involving Air New Zealand and Indonesia's National Airline,Garuda Indonesia,the Federal Court ruled last month both Airlines fixed surcharges using an industry wide index known as the Lufthansa Index.

But the case failed because the surcharges were imposed on inbound cargo to Australia and therefore did not affect a market in Australia.

Prices may well have been affected in Australia by the conduct but that does not mean the market in which the airlines were competing was located here,Federal Court judge Nye Perram said.

However,Dave Poddar, a partner at law firm Clifford Chance, said price-fixing provisions under the new cartel laws would have applied to conduct outside the Australian market.

Almost certainly under the current law it would've been a different outcome,poddar said.

The price fixing provisions under the new laws are seemingly broader in their application which arguably extends the reach of the cartel provisions under the new laws beyond conduct occurring within a market in Australia.

Since the Airlines conduct between 2001 and 2006 the law has been changed to ban price fixing conduct between competitors in relation to the supply of goods or services.

Marque Lawyers managing partner Michael Bradley agreed the case might have been decided differently under the current laws.

The price fixing laws have changed since this conduct occurred and, under the new laws, we think the outcome would have been different,Bradley said.

The new rules prohibit price fixing conduct between competitors, and competitors do not have to be competitors in a market, but competitors in relation to the supply of the relevant goods or services that are the subject of the price-fixing.

Bradley said even though the airlines dodged a penalty possibly up to 10 years in jail and more than A$10 million in fines businesses still faced uncertainty surrounding price fixing laws.

Business should derive no comfort from the decision,he said.What was peculiarabout this case was it was not that the Airlines were secretly talking to each other. They co ordinated an industry wide arrangement where they used publicly listed prices and everybody was following suit.

Attempts to patch up Australias cartel laws are under way.A draft review report, released in September, recommended the cartel law should be limited to goods or services supplied or acquired in Australian markets.

The cartel case is the last of a series of actions brought by competition watchdog the Australian Competition and Consumer Commission for price-fixing in the Australian Air cargo market. The ACCC actions resulted in airlines paying A$58 million in penalties to the Federal Court, including A$20 million from Qantas.

The ACCC is seeking legal advice on whether to appeal the decision. Any appeal needs to be filed by mid December.

Australian Air cargo market,
Air Cargo Services,
Air Cargo Carriers,
Air Cargo India
Go Air Cargo,
Jet Air Cargo,
International Air Cargo,
Chennai Cargo Air India,
India Airlines Cargo,

Mohini Porwal [ B Sc]
Trainee News Editor
New Zealand Aviation News Editor


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