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Home / Business / Companies / Airlines

Watchdog steps into airline cartel row

29 Nov, 2007 04:00 PM2 mins to read

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KEY POINTS:

The Commerce Commission said yesterday it had begun investigating claims airlines were involved in price fixing air cargo fuel surcharges.

Australian airline Qantas on Wednesday agreed to plead guilty and pay a US$61 million ($82 million) fine for its role in a conspiracy to fix rates for international
air cargo shipments.

United States authorities said the illegal conduct involved fuel surcharges in the international air cargo market between 2000 and 2006.

The local competition watchdog said it had launched its own inquiry into airlines' conduct.

It would not say which airlines it was investigating. "The investigation is looking across the industry," a spokeswoman said.

Qantas chief Geoff Dixon said his airline was cooperating with regulators.

"The practices adopted by Qantas Freight and the cargo industry generally to fix and impose fuel surcharges breached relevant antitrust laws," he said.

He said he understood more than 30 international airlines were under investigation.

The US legal action has already cost British Airways and Korea Airlines US$300 million each.

Thomas Barnett, assistant attorney-general at the US Department of Justice, said Qantas' guilty plea sent a clear message to those engaging in price fixing and other forms of illegal collusion.

"[They] will pay a heavy price for their crimes."

According to the charges, Qantas conspired with other carriers to fix rates for cargo shipments to and from the United States from at least January 2000 to February 2006.

Air NZ and Qantas and five other airlines already face a A$200 million ($229 million) class action related to alleged freight price-fixing.

Australian law firm Maurice Blackburn Cashman in February filed a class action in the Australian Federal Court against Qantas, Lufthansa, Singapore Airlines, Cathay Pacific, Air NZ, JAL and British Airways on behalf of thousands of international freight users.

It alleged the airlines formed a cartel to fix fuel, security and war-risk surcharges against Australian freight users, who were fleeced an estimated A$200 million over seven years..

- NZPA

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