Air-freight cartel starts to pay the price

THE fallout from the price-fixing air-freight cartel is starting to gather pace. The Australian Federal Court has just fined Qantas AU$20 million (US$13 million) and British Airways (BA) $5 million after it admitted an illegal arrangement in the airfreight market.

Meanwhile, New Zealand has just started it’s own legal battle against the two and 11 other airlines on the same charges. New Zealand’s competition watchdog, the Commerce Commission, filed papers in the Auckland High Court against: Air New Zealand, British Airways, Cargolux International Airlines, Cathay Pacific, PT Garuda Indonesia, Japan Airlines, Korean Airlines, Malaysian Airline System, Qantas Airways, Singapore Airlines Cargo Pte Limited and Singapore Airlines, Thai Airways and United Airlines.

Like their Australian counterparts, the New Zealand Commission claims that 60 airlines, of which these 13 were the main instigators, made an illegal global agreement in 1999-2000, with the support of the International Air Transport Association (IATA), to raise the price of freighting cargo by imposing surcharges for fuel and added security measures for more than nine years.

Criminal prosecution has finished in the US with the fines and levies already paid but the civil charges are still to be announced sometime in 2009. Europe will rule on criminal charges next year.

However, Air New Zealand claims that the Commission is “grandstanding”.

“We have repeatedly asked the Commerce Commission to present us with any evidence to indicate that Air New Zealand has breached any laws,” said Air New Zealand general counsel John Blair. “To date they have been either unwilling or unable to do so.”