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Jakarta Post

Garuda ordered to pay 19m Australian dollars for price fixing

  • News Desk

    The Jakarta Post

Jakarta   /   Fri, May 31, 2019   /   02:46 pm
Garuda ordered to pay 19m Australian dollars for price fixing A Garuda Indonesia cargo plane (Courtesy of/

Australia’s Federal Court has ordered flag carrier Garuda Indonesia to pay 19 million Australian dollars (US$13.13 million) for colluding on fees and surcharges for air freight services, according to a statement issued by the Australian Competition and Consumer Commission (ACCC).

The statement says the penalties followed the ACCC’s court action against a global air cargo cartel, which has so far resulted in penalties of 132.5 million Australian dollars against 14 airlines, including Air New Zealand, Qantas, Singapore Airlines and Cathay Pacific.

The Court found that between 2003 and 2006, Garuda made agreements that fixed the prices of security and fuel surcharges, as well as customs fees from Indonesia. It was ordered to pay 15 million Australian dollars. A further 4 million Australian dollars was fined for the imposition and level of insurance and fuel surcharges from Hong Kong.

According to the statement, the ACCC commenced legal action against 14 international airlines between 2008 and 2010 under the 29174 Trade Practices Act for conduct that occurred between 2002 and 2006.

Meanwhile, Garuda Indonesia VP corporate secretary M. Ikhsan Rosan said the airline denied price fixing and such punishment could not be imposed on Garuda.

He also said the court decision was not binding yet and the airline still had the opportunity to submit an appeal.

He said only Garuda Indonesia and Air New Zealand had challenged the accusation from the beginning, while other airlines sought amicable approaches after admitting guilt and paying fines of between 3 million and 20 million Australian dollars.

He said the fine of 19 million Australian dollars was excessive because when the case occurred the cargo was only valued at US$1.09 million from Indonesia and US$656,000 from Hong Kong. (bbn)