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The Commerce Commission is prosecuting three international airlines for poor disclosure in a price-fixing probe linked to overseas cartel investigations involving Air New Zealand.
The commission announced yesterday that it had filed criminal charges in the Auckland District Court against Cathay Pacific Airways, Singapore Airlines Cargo and Aerolineas Argentinas.
The airlines allegedly failed to comply with notices seeking documents and information under the Commerce Act in October 2007.
If found to be in breach of section 103 of the Commerce Act they can be fined up to $300,000.
But Cathay Pacific Airways claimed it had cooperated with the Commerce Commission during the investigation, and provided documents relating to its air cargo activities in New Zealand.
The airline said it was disappointed to be involved in the commission's investigations and it intended to vigorously oppose the case.
The charges have emerged as the commission investigates allegations of price fixing in the $400 million air cargo market. It is alleged airlines have colluded and reached agreements on the level of cargo rates, including fuel surcharges on international flights to and from New Zealand.
Commission chairwoman Paula Rebstock said: "Cartels are insidious and cause extensive damage to the New Zealand economy. They are difficult to detect and extremely difficult to investigate because of their secretive nature."
The commission declined to comment on the investigation but said if it concluded there was a breach of the Commerce Act proceedings would be filed in the High Court later this year.
Overseas competition authorities are also investigating the air cargo market. In the United States, British Airways, Korean Air, Qantas and Japan Airlines have settled and agreed to pay record fines.
In total, the US courts have already awarded penalties of US$1.2 billion ($1.55 billion) against airlines for participation in a cartel that has increased air cargo rates to and from the United States.
European Union investigators are looking into a global airline conspiracy to push up freight costs.
A spokesperson for Air New Zealand said it had provided answers to European investigators and a decision was expected to be some months away.
The airline is also alleged to be part of a cartel alongside Qantas, Lufthansa, Singapore Airlines, Cathay Pacific, JAL and British Airways to fix fuel, security and war risk surcharges against Australian freight users.
Air New Zealand's spokesperson said the airline had no comment on the prosecution of other airlines for failure to respond to the notices.
"As far as Air New Zealand is aware each regulator in the named jurisdictions is conducting its own independent investigation," the spokesperson said.
Companies or individuals who bring a cartel to the commission's attention can gain immunity from prosecution through its leniency programme.
PRICE-FIXING PROBE
* The Commerce Commission is investigating allegations of price fixing in the air cargo market.
* It has filed criminal charges against Cathay Pacific Airways, Singapore Airlines Cargo and Aerolineas Argentinas.
* The airlines allegedly failed to provide documents and information under the Commerce Act.
* They can be fined up to $300,000.
* Air New Zealand is being investigated by the European Union and the Australian Federal Court for alleged involvement in air cargo cartels.
- Additional reporting NZPA
