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Japan Airlines fined $2.3M after admitting liability in cargo price fixing cartel

Friday 29th June 2012

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Japan Airlines, the carrier that emerged from bankruptcy last year, has been fined $2.3 million for breaches of New Zealand’s competition law for its part in an air cargo price fixing cartel.

The penalty was imposed in the High Court in Auckland as part of a prosecution brought by the Commerce Commission.

Japan Airlines is the fourth airline to settle with the commission, which filed proceedings against 13 carriers in December 2008 alleging they colluded to impose fuel and security surcharges for air cargo shipments into and out of New Zealand.

British Airways, Cargolux International Airlines and Qantas Airways have already settled and today’s ruling brings total settlements to about $16.4 million.

Japan Airlines got a 35% discount on its fines to recognise its admissions and ongoing cooperation with the commission’s investigation,” the regulator said in a statement today. The airline will also pay the commission’s costs.

Air New Zealand, Cathay Pacific, Emirates, Korean Air Lines, Malaysian Airlines System, Singapore Airlines Cargo, Singapore Airlines Limited, and Thai Airways are defending themselves against the allegations in a case scheduled to continue in the High Court in Auckland in March 2013.

The commission dropped proceedings Garuda Indonesia, United Airlines and six Air New Zealand executives last year.

“The Commission is pleased to have settled with another airline,” said Mary-Anne Borrowdale, the commission general counsel, competition. “Wherever possible, if a party is prepared to admit liability we will seek to resolve issues through settlement. This provides welcome certainty for the litigants and is significantly less costly and drawn-out for all parties.”

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