Air New Zealand fined $16.3m for price fixing

Air New Zealand has been fined AU$15 million (NZ$16.3m) for price fixing.

Australia's Federal Court ordered the airline pay the hefty penalty for its role in a global air cargo cartel between 2002 and 2007.

The fine comes after legal action by the Australian Competition and Consumer Commission (ACCC).

The court found Air NZ made agreements with other airlines to fix fuel prices and insurance charges on air freight services flying in from Hong Kong. It was also found guilty of fixing insurance and security charges from Singapore to various locations, including some Australian airports.

"These illegal price fixing agreements unfairly reduced competition for the transport cost for goods flown into Australia," ACCC Commissioner Sarah Court said in a statement.

The court ordered Air NZ to pay AU$11.5m (NZ$12.4m) for price fixing fuel charges for cargo between Hong Kong and Australia. It imposed an additional payable penalty of AU$3.5m (NZ$3.8m) for price fixing in relation to the insurance and security surcharge from Singapore to Australia.

The Federal Court initially dismissed the ACCC's case against Air NZ in October 2014, as well as the case against PT Garuda Indonesia Ltd. The ACCC then appealed the decision to the Full Court of the Federal Court, and the appeal was upheld in March 2016.

Air NZ and Garuda both appealed the decision to the High Court, which unanimously dismissed the appeals in 2017.

"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," Ms Court said.

Fourteen airlines have been fined a total of AU$113.5m (NZ$122m) since the ACCC launched its investigation into the air cargo cartel in 2006.

The fifteenth airline involved, Garuda, had its penalty hearing this week, and judgment is still being deliberated.

Ms Court says these "significant" penalties show the ACCC'S commitment to taking down cartels.

Other competition regulators around the world have penalised airlines in Europe, the United States and Asia for their part in the air cargo cartel.

Air NZ has also agreed to pay AU$2m (NZ$2.2m) towards the ACCC's legal costs.