NZ court fines Cargolux, BA US$5.86 million for price-fixing

NEW Zealand's High Court in Auckland has ordered Cargolux International Airlines to pay NZ$6 million (US$4.62 million) in penalties and NZ$25,000 in costs, and British Airways to pay NZ$1.6 million in penalties and NZ$100,000 in costs for their involvement in an international price-fixing cartel for air freight.


The ruling comes after the two airlines, along with Qantas Airways, admitted to the Commerce Commission last month that they had colluded over prices to increase freight rates by levying fuel surcharges on air cargo shipments into and out of New Zealand.


The penalty for Qantas is yet to be handed down in court.


The case brought to court by New Zealand's competition authority stems back to allegations made in December 2008, when the commission accused 13 international airlines of price-fixing in the air freight market, reports the Australian Associated Press.


Justice Judith Potter's ruling said Cargolux's conduct would have hurt both price competition and the competitive dynamics of the air freight industry.


According to prosecutor Mary-Anne Borrowdale, the two airlines were awarded discounted penalties for their early admissions and cooperation with the commission in the price-fixing case.


"BA has received a greater discount, because of its commitment to further cooperation as the case progresses, but in each case the court has acknowledged the value to this agency of receiving assistance from the parties involved," Ms Borrowdale said.


Other airlines defending the commission's allegations are Air New Zealand, Cathay Pacific, Emirates, Japan Airlines, Korean Air Lines, Malaysian Airlines, Garuda, Singapore Airlines and Thai Airways. The case against United Airlines has been dropped.


The next round of court hearings concerning the alleged price-fixing cartel are scheduled to commence in July 2012.
(Source:http://www.schednet.com)