Qantas, BA Agree Fine In Cargo Price Fixing Case

October 28, 2008

Australia’s Qantas Airways agreed on Tuesday to pay a AUD$20 million (USD$12.2 million) fine for its part in a price-fixing case and vowed to help regulators as they probed 30 other airlines over the issue.

British Airways said it had also agreed to pay AUD$5 million, bringing an end to its involvement in the investigation, according to a statement.

Qantas said the fine was part of a settlement with Australia’s competition regulator. The agreement still needs approval from Australia’s Federal Court, where the local regulator is suing both Qantas and British Airways for alleged price-fixing on air freight between 2002 and early 2006.

“Qantas is one of the first airlines to settle its liability in Australia,” Qantas chief executive Geoff Dixon said in a statement, offering an unreserved apology.

“Since being advised of the allegations in May 2006, Qantas has cooperated fully with investigations,” he added.

Last May, a former Qantas executive accepted an eight month jail term as part of a plea agreement with the US Department of Justice, which had also secured guilty pleas by British Airways, Japan Airlines and Korean Air Lines.

The Australian Competition and Consumer Association (ACCC) continues to investigate other airlines, “some of which are assisting voluntarily, while others are not,” the regulator said in its statement.

“The ACCC expects to be able to resolve its investigations with other cooperating airlines shortly.”

In April, Japan Airlines pleaded guilty to conspiring to fix air cargo prices and paid a USD$110 million fine. British Airways and Korean Air Lines pleaded guilty last year and paid USD$300 million fines.

In February 2006, US and European officials raided airlines as part of the probe, which centered on the imposition of fuel surcharges in the international air cargo market.

British Airways last year also paid a fine of GBP121.5 million pounds (USD$187.5 million) after admitting to a collusion with rival Virgin Atlantic to fix fuel surcharges. Four former and then current executives were subsequently charged.

(Reuters)