ICCC ceases investigation into MoU

The Independent Consumer and Competition Commission has ceased an investigation into a Memorandum of Understanding (MoU) that was entered into by Air Niugini Cargo Limited and Hevilift Limited.

This was after considering that the MoU does not have any anti-competitive clauses and that competition concerns are not likely to be established.

On 16th August last year, it was reported that ANCL, a subsidiary of Air Niugini Limited, and Hevilift entered into a 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 ICCC conducted an investigation and obtained information, including copies of the MoU from Hevilift and ANCL separately.

Commissioner Ain said the ICCC assessed the matter under Section 50 of the Independent Consumer and Competition Commission Act 2002 (“ICCC Act”) and concluded that;

  • The MoU does not have any anti-competitive clauses or provisions and therefore Section 50 of the ICCC Act was not infringed by the MoU;
  • The MoU is 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 is more related to a marketing venture. There is a shared remuneration agreement for each flight booked by ANCL. Hevilift, however, can and does operate the ATR-42 Freighter solely for its own clients and benefits. ANCL can also elect not to use the Hevilift Aircraft should a better option be available.
  • That ANCL and Hevilift are not competitors. Hevilift is a dedicated freighter service provider for the transportation of personal and equipment in a variety of fields and has a diverse fleet of fixed and rotary wing aircraft backed by a highly experienced team.
  • ANCL withdrew its ATR72F freighter services effective on 11th December, 2015. Thus, ANCL operates its freighter services in the cargo hauls of the ANL commercial fleet.
  • Thus cargoes transported by Hevilift cannot be transported in ANL fleet cargo hauls, unless ANL decides 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.

Commissioner Ain, however, added that ANCL and Hevilift have been advised that the ICCC reserves its rights to conduct further investigation into the matter should any serious competition concerns arise in the future; that indicate that the arrangement warrants a clearance or authorisation by the ICCC.

Press release