ACCC takes on air cartel case

THE two worst airlines I have ever travelled on were Garuda and Iberian. The latter we took from Paris to Barcelona 10 years back.

The cabin was filthy and breakfast was a stale croissant and a paper cup half filled with lukewarm, undrinkable stuff I guessed was supposed to be coffee.

The former was a reluctant choice to get me from Brisbane to Jakarta as quickly as possible on urgent business. Actually Garuda has a chequered history. It was grounded by the European Union in 2007 when it was found a notorious daredevil pilot had ignored instructions to slow down on an approach, over-ran the landing strip and killed a lot of passengers.

Garuda is owned by the Indonesian government. A week or so ago it failed to duck a bullet in our High Court when its claim of immunity under the Foreign States Immunity Act was given the boot.

The ACCC's job is to stop uncompetitive behaviour. It has a pretty good record of busting cartels where big businesses enter into secret agreements to fix prices. The latest has been the ACCC's role as part of a co-ordinated action by international agencies alleging that a crop of international airlines agreed to rig the market by setting common freight rates.

Qantas has rolled over and copped a fine and a public shaming as have a few others. Next month the ACCC has a date in the High Court with Emirates, Singapore Airlines, Air New Zealand, Cathay Pacific and Thai Airlines. And now Garuda will join the line-up.

Hopefully all of them will get a big kick up the bum. Cartels are by definition anti-competitive and price fixing hurts absolutely everybody.

Bob Lamont is senior partner in Corporate Accountants and Rid Tax situated at the Night Owl centre. He welcomes your questions directed to boblamont1947@hotmail.com.

Topics:  accc, air new zealand, cartel, cathay pacific, emirates, garuda, opinion, singapore airlines, thai airlines




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