UPDATE: NZCC To Prosecute 13 Airlines For Alleged Price Fixing
The Commerce Commission alleges airlines throughout the world colluded to raise the price of freighting cargo by imposing fuel surcharges for more than nine years, affecting the price of cargo both into and out of New Zealand.
The watchdog alleges the airlines entered an illegal global agreement in 1999/2000 under the auspices of the trade organization International Air Transport Association.
"The airlines imposed the fuel surcharges between 2000 and 2006. The allegations also involve a series of regional price fixing agreements," commission chair Paula Rebstock said in a statement.
"In addition, the Commission alleges that a number of airlines conspired to price fix through the imposition of a security surcharge immediately following the 9/11 terrorist attacks."
It said it was initiating proceeding in the High Court Monday against Air New Zealand Ltd. (AIR.NZ), British Airways PLC (BAIRY), Cargolux International Airlines S.A, Cathay Pacific Airways Limited (CPCAY), Emirates Airline, PT Garuda Indonesia, Japan Airlines International Co. Limited, Korean Airlines Co. Limited (003490.SE), Malaysian Airline System Berhad Limited (3786.KU), Qantas Airways Limited, Singapore Airlines Cargo Pte Limited and Singapore Airlines Limited, Thai Airways International Public Company Limited (THAI.TH), United Airlines Incorporated.
Rebstock said the fixing caused extensive harm to the New Zealand economy, affecting revenue of NZ$2.9 billion over the nine years.
She said the case potentially involves 60 airlines and a great number of individuals throughout the world but the commission had focused on the airlines that had most affected New Zealand.
New Zealand's ability to compete internationally was more disproportionately affected than other jurisdictions in which the conduct took place, she added.
"New Zealand businesses and every consumer will have been directly affected by the increased air freight costs over many years."
Some airlines were cooperating with the commission and early resolution was possible in some cases, she said.
She noted the commission's policy of giving immunity to the first member a cartel to inform had been successful in the past.
Seven airline staff from unnamed airlines, including senior executives, have also been cited in the action. These individuals were "allegedly actively involved in promoting the conspiracy and/or they were allegedly in a position to stop the conduct and deliberately refrained from doing so."
Rebstock said participation in cartel activity is internationally regarded as one of the most egregious forms of anticompetitive behavior, hitting consumers and businesses with higher prices and less choice.
"Importantly, cartels undermine New Zealand's international competitiveness. Cartels are insidious. They are difficult to detect and extremely difficult to investigate because of their secretive and international nature."
She said airlines have been under similar scrutiny by other competition authorities around the world with which it was cooperating, including the U.S. Department of Justice, the Australian Competition and Consumer Commission and the European Commission.
In the U.S., British Airways, Korean Air, Qantas and Japan Airlines have settled and agreed to pay record fines. Most recently, Air France KLM has also settled in U.S. courts, paying a US$350 million fine.
In total, U.S. courts have already awarded penalties of US$1.2 billion against airlines for participation in a cartel that increased cargo rates to and from the U.S.
At least one U.S. air cargo executive will also serve a prison sentence as a result of his activity in a cartel, she said.
In Australia, the Federal Court in Sydney ordered Qantas to pay A$20 million and British Airways PLC to pay A$5 million in pecuniary penalties.
Shares in Air New Zealand, 76% owned by the government, were unchanged shortly after the announcement, at NZ$0.84.
-By Simon Louisson, Dow Jones Newswires; 64-4-471-5990; simon.louisson@dowjones.com Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=yM6Kqy729UXoSd7vO3GJww%3D%3D. You can use this link on the day this article is published and the following day.
Publié le 14 Décembre 2008 Copyright © 2008 Dowjones
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