The Commerce Commission has found no evidence that Ansett New Zealand and Air New Zealand colluded over recent domestic fare increases.
Ansett and Air New Zealand increased their domestic fares by 3 percent on December 15 and international airlines also increased their fares by 3 percent that day.
The International Air Transport Association (IATA) had previously recommended that airlines increase international fares by 3 percent because of aviation fuel price increases. Under the Commerce Act, international airline agreements approved by the Minister of Transport are exempt from the Commission's scrutiny.
Commission Chairman Dr Alan Bollard said the Commission investigated the increase in domestic air fares as a possible breach of the Commerce Act. The Act prohibits price fixing - competitors coming to formal or informal agreements about prices.
The Commission's investigation of the domestic increases confirmed that on November 20 Ansett announced a 3 percent increase in its domestic fares to take effect on December 15. On November 21 Air New Zealand announced that it too would increase its domestic fares by 3 percent effective December 15.
However, the investigation found no evidence that the airlines had colluded and agreed on domestic prices before making their announcements.
Dr Bollard warned that if the Commission does find evidence of price fixing in an industry it will take action against it.
"Any form of formal or informal communication among competitors about prices can breach the Act," Dr Bollard said. "In some cases, a firm giving a rival prior warning of a pricing announcement could be enough to be price fixing.
"The best way to avoid any possible conflict with the law is to never discuss any pricing issue with competitors.
"Price fixing is a serious matter. It is fundamentally anti-competitive because it prevents customer choice influencing prices."
Recent court action by the Commission has resulted in penalties totalling $300,000 against two bakery chains and $350,000 against seven Auckland Toyota dealers. There is also a case before the court against 12 North Island meat processing companies and 21 individuals.
Australian courts have imposed multi-million dollar penalties in price fixing cases under that country's Trade Practices Act, and in the United States people involved in price fixing can expect prison sentences.
The Commission could not investigate the international fare increase because it had been authorised by the Minister of Transport following a recommendation from IATA.
Media contact:Chief Investigator Commerce Act Geoff Thorn
