Federal Court dismisses cargo collusion case against Air NZ

written by australianaviation.com.au | October 31, 2014
photo - Rob Finlayson
photo – Rob Finlayson

Air New Zealand says it has no further questions to answer in Australia regarding alleged collusion in cargo markets after the Federal Court dismissed attempts by the competition regulator to sue the airline.

The long-running airfreight case was brought by the Australian Competition and Consumer Commission (ACCC) in 2010, which alleged agreements with airline competitors in Hong Kong and Singapore between 2000 and 2006.

Air NZ said in a statement on Friday the court found in favour of the airline and Garuda, the only two carriers to defend the allegations through to the trial in May 2013.

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“Today’s court decision follows the release of Air New Zealand in June from the civil class action without liability or payment and brings an end to this protracted investigation and legal claims in Australia,” Air NZ said in a statement.

The airlines argued that to the extent there were any agreements, they were appropriately authorised by the relevant regulators outside Australia.

“This decision is important in aviation because international operators need clarity of the legal boundaries of the ‘markets’ in which they operate,” Air NZ general counsel John Blair said in a statement.

“The distinction between where competitive markets exist and where jurisdiction lies determines which regulators’ requirements must be met.

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“Respect for national sovereignty and legal jurisdiction has been a foundation of the aviation industry since 1919.”

The Federal Court judgement, published on Friday, said the case related to the setting of fuel surcharges as well as insurance and security surcharges at Hong Kong and Singapore, and in the case of Garuda, Indonesia.

The court accepted the airlines’ argument that the no Australian market was involved with respect to alleged collusion among the airlines involved.

“The competition which occurred between the airlines and which the surcharges interfered with was competition in markets in Hong Kong, Singapore and Indonesia and not competition in any market in Australia,” Justic Nye Perram wrote in his judgement.

“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.

“The actions will be dismissed.”

Air NZ, which was cleared by the European Commission in 2010 and US Department of Justice in 2011, said it would continue to defend a class action claim in the US, the “only remaining litigation arising from this matter”.

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