ComCom reaches cartel settlement with three airlines

NZPA

Friday 18th March 2011

The Commerce Commission has reached settlements with three international airlines charged in a major cartel proceeding, ahead of the first hearing in the case due in May.

Qantas Airways, British Airways and Cargolux International Airlines had agreed settlements which involved admitting liability and paying significant penalties, the commission said today.

Further information about the settlements could not be released until they had been reviewed by the court.

The commission started proceedings against 13 international airlines in December 2008, alleging the airlines colluded to raise the price of freighting cargo by imposing fuel surcharges on cargo shipments into and out of New Zealand.

As well as settling with the three airlines, the commission said it had discontinued a case against United Airlines.

Commission general counsel of enforcement Mary-Anne Borrowdale said the commission continued to focus its case and direct its efforts towards those airlines with large turnover in New Zealand markets.

The commission was preparing for the first stage of the price-fixing case at which the key issue was the meaning of a 'market in New Zealand' and whether air cargo services inbound to New Zealand were part of such a market.

"The commission is preparing to test whether it can pursue price-fixing conduct that occurs overseas. We need to know whether deliberate collusion overseas, to affect New Zealand markets, is something that we can take enforcement action against. Our efforts to streamline and focus the case have that central issue in mind," Ms Borrowdale said.

The airlines defending the action were Air New Zealand, Cathay Pacific Airways, Emirates, Japan Airlines International Co, Korean Air Lines Co, Malaysian Airlines System Berhad, PT Garuda Indonesia, Singapore Airlines Cargo Pte and Singapore Airlines, and Thai Airways International Public Co.

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