Qantas Airways has finally closed the book on its involvement in a 6 year cartel to fix air cargo prices after it agreed to pay a fine of NZ$6.5 million ($4.8 million) to New Zealand’s commerce commission.
Under the deal reached in New Zealand, Qantas will plead guilty to participating in the cartel with other international airlines, including Air New Zealand.
In exchange, the Commerce Commission will recommend the NZ$6.5 million penalty to the country’s High Court at a hearing for April 11.
New Zealand was the last of six jurisdictions, including Australia, where Qantas was fined and in some cases faced a class action for fixing prices in its freight division between 2000 and 2006.
The NZ$6.5 million fine included a 50 per cent discount for the airline’s co-operation with the commission in its investigation.
The New Zealand fine comes after Qantas paid a similar charges in Australia, Europe, Canada and the US following a worldwide investigation launched by competition authorities in late 2005 when Deutsche Lufthansa sought immunity from the US Department of Justice in return for co-operating.
Including the New Zealand fine, Qantas has paid more than $100 million in penalties and the former head of the airline’s North American freight division was sentenced to eight months jail.
In Australia, government data on air fares showed business class and full priced economy fares remained higher than a year earlier in March, while discounted air fares were still well below the same time a year ago.
JP Morgan analysts said Qantas’ exposure to the Australian corporate market, which was driving business traffic, would help offset yield pressure in the leisure segment where it may only partially recover higher fuel costs.
Source: Australian Financial Review (March 21, 2011)