Qantas agrees settlement with New Zealand authorities over cartel allegations

13 May 2011

15 May 2011 | Angeline Albert

The New Zealand High Court has handed out its highest ever fine for cartel activity to Qantas Airways.

The New Zealand Commerce Commission (NZCC) recommended imposing a fine of NZ$6.5 million (£3.1 million) as part of a settlement between the two parties in its air cargo cartel case. Qantas has admitted breaching the Commerce Act by exchanging information with other cargo carriers to fix the fuel surcharge component of the price for international air cargo services, including those to and from New Zealand.

Qantas' fine includes a 50 per cent reduction for the airline’s cooperation with the NZCC investigations. In his High Court judgment Justice Allan said: “As soon as the nature and scale of the problem came to the notice of Qantas senior management and its board, the commission was advised that Qantas would co-operate in every respect."

It forms parts of proceedings brought by the NZCC against a number of international airlines it alleges colluded to fix the price of air freight cargo. The judge also noted the airline has committed to making its staff available as witnesses in the cartel case against the defending airlines.

The airlines continuing to defend the charges are: Air New Zealand, Cathay Pacific Airways, Emirates, Japan Airlines International Co, Korean Air Lines Co, Malaysian Airlines System Berhad, Singapore Airlines Cargo Pte, Singapore Airlines and Thai Airways International. The first stage of the Court hearing is scheduled to continue until early June.

British Airways and Cargolux International Airlines have also agreed settlements with the NZCC, bringing the total amount of fines dispensed in this case to NZ$14.1 million (£6.8 million).

Investigations into the cartel in other jurisdictions include Australia, the US, Canada, South Korea and the European Union and fines .

NZCC general counsel for enforcement, Mary-Anne Borrowdale said: “It is appropriate to recognise that Qantas admitted its price-fixing at the very earliest opportunity, and is providing genuine assistance with the Commission’s case against the defending airlines.”

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