Friday, June 13, 2008

ACCC review of IATA Cargo Tariff and Interlining

We are writing to advise AFIF members of an important and imminent change affecting published general aircargo rates and rules.

IATA member airlines operating into and out of Australia have voted not to seek further immunity (authorisation) from the Australian Trade Practices Act (TPA) in respect of the final review into matters affecting their members cargo tariff and interlining activities.

Please refer to the attached letter from Glyn Hughes of IATA

IATA have, by necessity, requested an extension to the existing 'immunity until late September, in order to give them sufficient time to prepare for the necessary changes that will need to be made. AFIF has, under the circumstances, given written support in a submission to the ACCC for the extension to be granted.

IATA will need to delete, for the Australian market, any 'Resolutions', tariffs, or rules that may have the effect of reducing or limiting competition, or of fixing rates and charges for specified services.

As a result, when the extension expires in late August, a number of major changes to the TACT Rates and TACT 'Rules' books will need to be made. The biggest change will be the removal of multilateral rates from the TACT Rates books. In the future, airlines operating to and from Australia may elect to publish their own general rates in the TACT Rates books. Rate construction to 'off-line' destinations, via transhipment points, will need to be negotiated with individual airlines.

Another effect will be the removal of IATA Resolutions effecting tariff matters, as stipulated in the TACT Rules book. Resolution 502, which currently stipulates that for this market the volumetric equivalent will be 6000cc = 1kg, will be one such rule that will be removed from this market. We have raised the hypothetical issue with IATA as to what might happen in the event that a shipment is moved on an interline arrangement between two airlines using different volumetric calculations!

In addition, the TACT Rules also currently states that the Dangerous Goods Processing Fee for Australia shall be A$60. This will be removed and free market forces will apply.

At the time of issuing this advice, we are still trying to clarify other aspects of the changes.

We will advise more information in due course but ask that you begin to prepare for these inevitable changes.

Thank you and kind regards,

Brian Lovell

Chief Executive Officer

Australian Federation of International Forwarders Ltd (AFIF)

Suite 403, Level 3

152 Bunnerong Road

Eastgardens NSW 2036

Tel: (61 2) 9314 3055

Fax: (61 2) 9314 3116