The Commerce Commission has formally warned two companies who were competing for air ambulance evacuations to New Zealand, following an investigation into price-fixing.South Pacific Air Ambulance (now known as Maccawat), based in New Zealand, and CareFlig
The Commerce Commission has formally warned two companies who were competing for air ambulance evacuations to New Zealand, following an investigation into price-fixing.
South Pacific Air Ambulance (now known as Maccawat), based in New Zealand, and CareFlight, based on Australia's Gold Coast, provide air ambulance evacuations primarily from the Pacific region to New Zealand.
The commission had reached "administrative settlements" with the two companies, which included a formal warning, commission spokeswoman Kate Morrison said.
As part of the settlement both companies acknowledged they "inadvertently breached" the Commerce Act by agreeing on a price that CareFlight would quote for an air ambulance evacuation in 2009.
The price fixing was instigated by the then managing director of South Pacific Air Ambulance and none of its other directors were involved or aware of the conduct, she said.
Both companies had "fully cooperated" with the commission but its investigation found neither company had a "clear understanding of their obligations" under the Commerce Act -- particularly where the boundaries lay for companies who were competitors but also subcontracted to each other.
In some instances, when the New Zealand-based plane that South Pacific Air Ambulance hired was unavailable, it sought sub-contract prices from CareFlight, which meant they were in a subcontracting relationship, she said.
However the two companies were also competing for a final contract and were competitors, she said.
"In a subcontracting relationship some pricing information will be exchanged legitimately but the parties as competitors must not disclose or agree the prices they intend to offer the final consumer," Ms Morrison said.
During 2009, the two companies had been exploring an acquisition or buy out and CareFlight purchased the South Pacific Air Ambulance business and assets in January 2010, she said.
Until a merger and acquisition was completed, companies were still competitors and could not discuss quotes and prices.
If businesses were unsure about their legal obligations they should seek independent advice to avoid breaching the Act, Ms Morrison said.
As part of the settlement, both companies agreed to provide training to staff about Commerce Act compliance.
CareFlight had also agreed to develop and implement Commerce Act compliance policies and procedures.
