Monday, November 21, 2011

Another Air Freight Cartel Fine as Cargo Carriers Admit Customs and Surcharge Fixing

Korean Air in the Dock This Time - With More to Come
Shipping News Feature

AUSTRALIA – Yet another air freight cartel lumbers on (if you want to see how bad things are just type cartel into the News Search box above). This time its back to sunny Australia, only it’s not so sunny for Korean Air following the Federal Court’s decision earlier today to slap them with a A$5.5 million fine for breaching anti trust legislation. This now brings to eight the number of air cargo carriers hit with fines totalling over A$50 million to date.

With fines so far exceeding any previous penalties produced from a single investigation by the Australian Competition and Consumer Commission (ACCC) the total is expected to rise as proceedings against Singapore Airlines, Cathay Pacific, Emirates, Air New Zealand, Malaysian Air Lines and Thai Airways International continue. Charges against Garuda, the Malaysian carrier, have been suspended pending a High Court appeal following the dropping of all charges in April this year against that airline in the similar case of a New Zealand cartel.

Korean Air admitted offences in Court including colluding with other carriers between 2003 and 2006 to fix the prices of fuel and security surcharges and customs agency fees. This conduct applied to the international carriage of freight from Indonesia to destinations throughout the world, including Australia. The arrangement in relation to customs fees also applied to cargo from Australia to Indonesia.

The Court also issued restraining orders against Korean Air to desist from any similar conduct for a period of five years and to pay a contribution towards the ACCC's costs of $200,000 but the penalty against it was mitigated by the company’s actions following charges being brought according to ACCC chairman Rod Sims who said:

"These proceedings demonstrate the ACCC's determination to pursue sanctions for cartel conduct. Korean Air Lines agreed to provide further assistance by making additional documents available for use against other respondents."