The Australian Competition and Consumer Commission today issued a determination granting the International Air Transport Association authorisation* for most of its programs on a transition basis.
"This determination provides for the phased removal of the current immunity covering most of IATA's programs within the next twenty months", ACCC Chairman, Mr Graeme Samuel, said today.
"IATA has high industry coverage and the involvement of its members in jointly determining many arrangements in the aviation industry can naturally raise competition concerns".
The ACCC has for some time now been reviewing an authorisation granted to IATA indefinitely in 1985 for all of its activities apart from its travel agency program which was reviewed in 2002.
Recently, IATA asked the ACCC to provide it with a replacement authorisation which would see immunity for all covered programs progressively expire in the period up until June 2008. IATA stated in making the request that elements of its conduct did not raise significant issues in competition law in Australia and could be undertaken without authorisation either in their current form or after modification.
For other elements the transition period will allow IATA time to review the systems and if necessary seek further authorisation from the ACCC. In its determination the ACCC has recognised significant transition benefits in allowing IATA time to assess and adjust its conduct before the current immunity lapses.
The transition periods adopted by the ACCC have taken into account the concerns raised by the freight forwarding industry following the draft determination.
The granting of this authorisation provides IATA with an opportunity to address concerns raised by the ACCC and other parties and reduce its reliance on authorisation.
*The Trade Practices Act 1974 prohibits competitors from agreeing to work together in a way that reduces competition. Authorisation provides immunity from court action arising from such agreements but can only be granted where the ACCC is satisfied that the public benefit arising from the conduct outweighs any public detriment.
IATA is a non-governmental international trade association of most carriers operating scheduled international air services in the transport of passenger, mail and cargo. IATA members accounted for 95 per cent of passengers and 97 per cent of cargo carried to and from Australia by air in 2004.
The activities covered by the ACCC's determination comprise:
