Garuda Indonesia drops price-fixing appeal, fined $15mn

The Australian Federal Court has ordered Garuda Indonesia (GA, Jakarta Soekarno-Hatta) to pay a penalty of AUD19 million Australian dollars (USD15 million) in relation to a global air cargo price-fixing case after Indonesia’s flag carrier dropped an appeal against the penalty levied two years ago. Garuda had withdrawn its June 2019 appeal against the May 2019 judgement, which found it colluded with other airlines on fees and surcharges for air freight services for a wide range of consumer goods between 2003 and 2006, the Australian Competition & Consumer Commission (ACCC) said in a statement. The case was part of a long-running ACCC action against a global price-fixing cartel in the air cargo industry. Taking into account the crippling effects of COVID-19 on the airline industry, the court ordered Garuda to pay the penalty in monthly instalments between December 2021 and December 2026 and to contribute to the ACCC’s costs. Under the court orders, if Garuda misses a monthly payment, the entire remaining outstanding amount becomes due for payment within 30 working days. “What is important is that Garuda has been ordered to pay the full penalty for its role in this serious price-fixing cartel without a further appeal,” ACCC Chairman Rod Sims said. “We are pleased this concludes this long-running case against 15 global airlines, including Garuda, Air New Zealand, Qantas, Singapore Airlines, and Cathay Pacific, which has resulted in total penalties of AUD132.5 million (USD102.1 million) being ordered by the court.” He added: “Businesses of all sizes should note the ACCC’s determination to fight this large international cartel. Significant penalties, like the AUD19 million penalty ordered against Garuda, send a strong warning that anti-competitive conduct has serious consequences. We will also continue to closely watch for any signs of anti-competitive conduct in the airline industry specifically following the disruption to travel due to COVID-19.” Garuda did not immediately respond to an emailed request for comment.