Korean to pay cargo penalty

THE Australian Federal Court in Sydney has ordered Korean Air Lines to pay AU$5.5 million (US$5.5 million) for its part in the cargo price-fixing cartel.

The Australian Competition and Consumer Commission (ACCC) began proceedings against the carrier on 5 March 2010 alleging that it reached understandings with other international airlines.

Korean Air Lines has admitted colluding over fuel surcharges between May 2003 and February 2006; security surcharges from May 2003 to February 2006; and customs fees during the period of May 2004 to October 2005.

The practice affected the carriage of freight from Indonesia to destinations throughout the world, including Australia. The arrangement in relation to customs fees also applied to cargo from Australia to Indonesia.

The penalty would have been higher if the airline had not cooperated and made admissions at this stage in the litigation, ACCC chairman Rod Sims said.

“Korean Air Lines agreed to provide further assistance by making additional documents available for use against other respondents,” Sims added.

Justice Stone also made orders restraining Korean Air Lines from engaging in similar conduct for a period of five years and to pay a contribution towards the ACCC’s costs of $200,000.

Proceedings against Air New Zealand, Cathay Pacific, Emirates, Singapore Airlines, Malaysian Air Lines and Thai Airways International continue. The ACCC’s proceedings against Garuda are stayed pending the outcome of an appeal to the High Court.

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