The federal court has ordered Garuda and Jetstar to pay $19 million and $1.95 million in penalties, respectively, after action taken by the Australian Consumer and Competition Commission.
Garuda’s fine was in relation to colluding on fees and surcharges for air freight services.
The court found that between 2003 and 2006, Garuda made and gave effect to agreements that fixed the price of security and fuel surcharges, as well as a customs fee from Indonesia.
It was ordered to pay $15 million, and a further $4 million was ordered for the imposition and level of insurance and fuel surcharges from Hong Kong.
The ACCC said the penalties follow its court action against a global air cargo cartel, which has so far resulted in penalties of $132.5 million against 14 airlines, including Air New Zealand, Qantas, Singapore Airlines and Cathay Pacific.
ACCC Chair Rod Sims price fixing is a serious matter and this international cartel was one of the worst examples the organisation had ever seen.
“We are committed to pursuing cartel conduct from both domestic and overseas operators, and think the total penalty ordered against all the airlines involved sends a strong deterrent message, particularly when it comes to international anti-competitive conduct,” he said.
The federal court ordered Jetstar to pay $1.95 million in penalties for making false or misleading representations about consumer guarantee rights.
The court found that between April 2017 and March 2018, Jetstar made false or misleading representations on its website about the rights and remedies available to consumers under the Australian Consumer Law.
The ACCC said Jetstar made false or misleading statements on its website that some fares were not refundable, and that consumers could only get a refund if they purchased a more expensive fare.
Mr Sims said Jetstar’s representations were false or misleading because all flights come with automatic consumer guarantees that cannot be excluded, restricted or modified, no matter how cheap the fare.
“If a flight is cancelled or significantly delayed, passengers may be entitled to a refund under the consumer guarantees,” he said.
