Qantas to pay New Zealand record price-fix penalty

Australian carrier Qantas has been ordered by a New Zealand court to pay a record NZ$6.5 million ($5.1 million) penalty for price fixing, the country's competition watchdog announced Thursday. The fine, "the highest yet for price fixing in this country", was proposed by Qantas as part of a pre-trial settlement in an air cargo cartel case and has now been confirmed by the High Court, the Commerce Commission said. The decision was announced Wednesday as the commission was in another courtroom opening the first stage of the cartel proceedings in which several international airlines are accused of colluding to raise the price of freight. In the Qantas decision, the judge noted the starting point for the penalty was $13 million, with a 50 per cent discount for Qantas? high level of co-operation with the investigation. "As soon as the nature and scale of the problem came to the notice of Qantas senior management and its board, the commission was advised that Qantas would cooperate in every respect," Justice Allan said in his judgment. "It has continued to do so over a significant period. In particular, it has proactively provided extensive evidence and documents detailing the collusive FSU (Fuel Surcharge Understanding) and its own participation in that FSU." Qantas was also committed to making its staff available as witnesses in the cartel case against the various airlines. The commission's counsel for enforcement, Mary-Anne Borrowdale, said it was appropriate to recognise Qantas admitted price fixing "and is providing genuine assistance with the commission?s case against the defending airlines." The Qantas penalty brought the amount achieved in settlements of the cartel case to $14.1m, the commission said, after it also settled with British Airways and Cargolux International Airlines. Airlines continuing to defend the charges are Air New Zealand, Cathay Pacific Airways, Emirates, Japan Airlines International Co, Korean Air Lines Co, Malaysian Airlines System Berhad, Singapore Airlines Cargo Pte and Singapore Airlines, and Thai Airways International Public Company. The commission's action alleges airlines colluded on fuel surcharges on international cargo flights between 2000 and 2006. Similar prosecutions have led to huge fines across the globe, with the European Commission in November fining 11 airlines a total of 800 million euros ($1.10 billion) after 19 carriers were forced to pay $1.6 billion in the United States.