Federal Court orders Emirates to pay out $10m in penalties

DUBAI-based airline Emirates has been ordered to pay $10 million in penalties by the Federal Court in Sydney for engaging in cartel conduct.

It comes as the Australian Competition and Consumer Commission prepares to launch proceedings against a number of international airlines for alleged cartel conduct relating to price fixing of fuel and other surcharges.

The ACCC launched the action against Emirates in 2009 claiming it had breached the Trade Practices Act 1974.

In agreeing to the settlement, the airline admitted to: illegal understandings on a fuel surcharge, a security surcharge and a customs fee on air freight carried from Indonesia to Australia and other countries between May 2006 and October 2001 ($7 million penalty), and seeking an understanding with DAS Air Cargo relating to rates charged for the supply of air freight services from Australia ($3 million penalty).

ACCC chairman Rod Sims said in a statement Emirates had become the 10th airline to settle in the proceedings.
"This settlement with Emirates brings the total penalties ordered in Australia against international airlines involved in the cartel to $68 million," Mr Sims said.

"These are the highest penalties to have ever been ordered in an ACCC investigation.

"This result sends a strong message that the ACCC and the Australian courts will not tolerate any business - regardless of size or country of origin - engaging in cartel conduct that harms competition in Australia. Cartel conduct is illegal and often results in increased prices for consumers."

Emirates was also ordered to pay $500,000 towards the ACCC's court costs and to restrain from engaging in similar conduct for five years.

The ACCC's proceedings against Singapore Airlines, Cathay Pacific, Air New Zealand and Thai Airways are due to be heard in the Federal Court in Sydney from October 22.

The ACCC is also proceeding against Garuda Indonesia following a High Court decision last month declaring that the airline was not eligible for foreign state immunity.

"The ACCC has been pursuing this large and complex litigation for four years, so the October trial will be an important milestone in our continuing fight to stop cartel conduct," Mr Sims said.

APN Newsdesk is seeking comment from Emirates.