ICCC halts investigation into Air Niugini and Heavilift deal

The National Business

THE Independent Consumer and Competition Commission (ICCC) has ceased an investigation into a memorandum-of-understanding (MoU) that was entered into by Air Niugini Cargo Ltd (ANCL) and Hevilift Ltd (Hevilift).
According to a statement from ICCC, this was because the MoU did not have any anti-competitive clauses and that competition concerns were not likely to be established.
Last Aug 16, it was reported by the Post-Courier that ANCL, a subsidiary of Air Niugini Ltd (ANL), and Hevilift entered into an MoU for the usage of a Hevilift ATR-42 freighter aircraft by ANCL for freighter purposes.
The ICCC then initiated inquiries into the arrangement.
ICCC commissioner and chief executive officer Paulus Ain said the matter was assessed under Section 50 of the ICCC Act 2002 and concluded that:

  • The MoU did not have any anti-competitive clauses or provisions and therefore Section 50 of the ICCC Act was not infringed by the MoU;
  • the MoU was not a form of joint-venture between ANCL and Hevilift, but a statement of partnership to make Hevilift’s ATR-42 freighter available to ANCL should ANCL require it. It was more related to a marketing venture.

There was a shared remuneration agreement for each flight booked by ANCL. Hevilift, however, could and did operate the ATR-42 freighter solely for its own clients and benefits.
ANCL could also elect not to use the Hevilift aircraft should a better option be available;

  • ANCL and Hevilift were not competitors.

Hevilift was a dedicated freighter service provider for the transportation of personal and equipment in a variety of fields, and had a diverse fleet of fixed and rotary wing aircraft backed by a highly-experienced team;

  • ANCL withdrew its ATR72F freighter services effective on Dec 11, 2015. Thus, ANCL operated its freighter services in the cargo hauls of the ANL commercial fleet;
  • Cargo transported by Hevilift could not be transported in ANL fleet cargo hauls, unless ANL decided to commission a dedicated freighter similar to that of Hevilift.

ICCC considered that it would not be onerous but this would come at a huge cost to ANL.
Ain said ICCC reserved its rights to conduct further investigation into the matter should any serious competition concerns arise in the future.