Garuda Indonesia has agreed to pay a A$19 million ($15 million) penalty for its involvement in an air cargo cartel, as ordered by Australia’s Federal Court in a May 2019 judgement.

The ACCC states in a 20 April press release that the Federal Court last week ordered Garuda to pay the fine as well as “a contribution to the ACCC’s costs”, after the Indonesian flag carrier withdrew its appeal submitted in June 2019.

Garuda 737-800

Source: Wikimedia Commons

A Garuda 737-800 taking off in September 2020

The court approved for Garuda to pay monthly instalments between December 2021 and December 2026. Should it miss a payment, the remaining outstanding amount would be due within 30 working days.

Between 2008 and 2010, the Australian Competition and Consumer Commission (ACCC) initiated legal action against 15 global airlines for colluding on fees and surcharges for air freight services for consumer goods, provided between 2002 and 2006.

Thirteen airlines settled with the ACCC, while Air New Zealand and Garuda proceeded to a trial which concluded in May 2013.

The penalty on Garuda relates to its actions between 2003 and 2006.

ACCC’s chair Rod Sims states: “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 A$132.5 million being ordered by the court.”

“Businesses of all sizes should note the ACCC’s determination to fight this large international cartel. Significant penalties, like the A$19 million penalty ordered against Garuda, send a strong warning that anti-competitive conduct has serious consequences.”

He adds: “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, given our monitoring role in the domestic airline industry.”