A Matter of Anti-Trust

Garuda Indonesian Fined AU$19 Million for Price Fixing on Cargo and Surcharges

The Australian Competition and Consumer Commission (ACCC) has announced that the Australian Federal Courts have rendered a decision requiring Garuda Indonesia to pay AU$19 million in penalties and fines for illegally colluding on air freight fees and surcharges.

The most recent announcement follow similar judgments brought by the ACCC against an air cargo cartel that saw penalties of AU$ 132.5 million levied against 14 airlines that includes Air New Zealand, Qantas, Singapore Airlines, and Cathay Pacific.

The Courts determined that over a three year period from 2003-2006, Garuda was involved in price-fixing for security and fuel surcharges together with customs fees for Indonesia. As a result, two separate fines of AU$15 million and AU$4 million were imposed by the court. The smaller, AU$4 million fine was for price fixing for insurance and fuel surcharges on cargo carried from Hong Kong.

Garuda, represented by the vice-president and corporate secretary M. Ikhsan Rosan, denied any price fixing activity and claimed the fine imposed was, in any case, non-binding and would be appealed through the Courts.

Only Garuda Indonesia and Air New Zealand are legally challenging the Court’s findings. The other airlines have negotiated guilty pleas in return for reduced fines of between AU$ 3 million and AU$ 20 million.

Rosan branded the AU$19 million fine as excessive in comparison with value of the cargo carried.

 

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