Australian judge hits Garuda for price fixing, fines it US$13 million
INDONESIAN airline Garuda has been ordered by the Federal Court of Australia to pay A$19 million (US$13
INDONESIAN airline Garuda has been ordered by the Federal Court of Australia to pay A$19 million (US$13.14 million) for air cargo price fixing as part of a massive international cartel.
The latest penalty brings to a total of A$132.5 million that have been levied so far against 14 airlines, according to the Australian Competition and Consumer Commission.
The fine imposed on Garuda by the Australian courts is the second-highest amount of penalties for air cargo price fixing. But these are only the Australian penalties - fines have been levied on price-fixing airlines by courts and regulators around the world.
Garuda will also have to pay the legal costs of the Commission, which was the plaintiff in the case.
The combined penalty levied on Garuda is the second largest of all the airline price fixing cases. And it exceeds Garuda's annual cargo revenue between 2003-2006 on all routes.
'The penalty to be imposed upon Garuda must be such as to make crystal clear to international commercial airlines engaged in air freight that collusive price fixing is not profit enhancing,' Judge Perram said.
He imposed two separate penalties. A penalty of A$15 million was imposed because Garuda fixed the price of security and fuel charges, along with a customs fee from Indonesia. A second penalty of A$4 million was imposed because Garuda imposed insurance and fuel surcharges from Hong Kong, reports New York's FreightWaves.
Numerous international airlines have been accused of collusive behaviour including, but not limited to, Air New Zealand, British Airways, Cargolux Airlines, Cathay Pacific, Emirates, Malaysia Airline, Martinair Holland, Qantas Airways, Singapore Airlines Cargo, Societe Air France, Thai Airways and Japan Airlines.
The judge also commented on the length and complexity of the case. 'After more than nine years of litigation including, at least to this stage, a six month trial, two appeals to the Full Court of the Federal Court and two appeals to the High Court, the Australian Competition and Consumer Commission has succeeded in demonstrating that Garuda Indonesia Ltd contravened the Trade Practices Act 1974.'