Qantas agrees to $6.5m fine in cartel case, Air NZ fights on

Qantas, British Airways and Cargolux have reached settlements with the Commerce Commission over their part in an international air cargo cartel. Photo / supplied.

Qantas Airways, Australia's national carrier, has agreed to pay a $6.5 million fine for its role in fixing air cargo prices, leaving Air New Zealand Ltd. among a dwindling group of airlines still fighting the Commerce Commission action.

Qantas' settlement with the regulator, which still needs to be ratified by the High Court, represents a 50 per cent discount, and is one of three deals cut by the antitrust regulator.

The other airlines to accept liability are British Airways Plc. and Cargolux International Airlines S.A.

The regulator expects to begin its case against Air New Zealand, Cathay Pacific Airways Ltd., Emirates, Japan Airlines International Co., Korean Air Lines Co., Malaysian Airlines System Berhad Ltd., PT Garuda Indonesia,
Singapore Airlines Cargo Ptd., Singapore Airlines Ltd., and Thai Airways International Public Co. in July next year. It dropped its pursuit of United Airlines Inc.

"The commission is preparing to test whether it can pursue price-fixing conduct that occurs overseas," general counsel of enforcement Mary-Anne Borrowdale said in a statement.

"We need to know whether deliberate collusion overseas, to affect New Zealand markets, is something that we can take enforcement action against."

Today's three settlements join two prior deals by freight companies Geologistics International (Bermuda) and EGL who paid a combined $3.65 million in penalties.

The alleged price-fixing has been the subject of antitrust process worldwide, with big settlements from multi-national airlines in Europe and the US.

Some of the alleged agreements appear to have been in place since 2001.

In 2006, air freight forwarding services in and out of New Zealand generated $450 million in revenue.

Air NZ avoided censure from European authorities and is still waiting for its day in court in the U.S. Australian rival Qantas has cut deals and paid fines in the US, Australia, Canada, Korea and Europe.