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Commerce Commission tweaks air cargo case

Wednesday 20th April 2011

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Six Air New Zealand executives and PT Garuda Indonesia are no longer facing prosecution in a case the Commerce Commission is pursuing alleging anti-competitive behaviour in the air cargo market.

The commission said it has "refined" the case ahead of the start of a first hearing next month.

It today filed discontinuances against PT Garuda Indonesia and six Air New Zealand executives. It has never named the executives.

The case alleging airlines colluded to raise the price of freighting cargo continues against Air New Zealand Ltd, Cathay Pacific Airways Ltd, Emirates, Japan Airlines International Co, Korean Air Lines Co Ltd, Malaysian Airlines System Berhad Ltd, Singapore Airlines Cargo Pte and Singapore Airlines Ltd, and Thai Airways International Public Company Ltd. The conduct is alleged to have occurred over a period of more than seven years.

The first stage of the case will determine the issue of defining the market and it starts on May 11 and the rest of the case will begin in July 2012.

On April 5, the High Court imposed penalties against British Airways plc and Cargolux International Airlines SA. Cargolux was ordered to pay $6 million and BA $1.6 million. In both these judgments, the court noted that it was making no findings in respect of the airlines that continue to defend the proceedings.

The commission has also resolved the proceedings against Qantas Airways Ltd, which admits its participation in the cartel. At a hearing held in the Auckland High Court earlier this month, the commission and Qantas recommended that the court impose a penalty of $6.5 million. The court's judgment is pending.



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