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Japan Airlines admits to price fixing in New Zealand

By control on June 29, 2012

The High Court of New Zealand has ordered Japan Airlines to pay NZ$2.28 million for participating in an airfreight cartel. JAL, which has pleaded guilty to conspiring to fix fuel and security surcharges on flights to and from New Zealand, is the fourth carrier to settle with the Commerce Commission since it launched its investigation in December 2008.

“The commission is pleased to have settled with another airline,” Mary-Anne Borrowdale, the Commerce Commission's general counsel, competition, said in a statement. “Wherever possible, if a party is prepared to admit liability we will seek to resolve issues through settlement. This provides welcome certainty for the litigants and is significantly less costly and drawn out for all parties.”

In exchange for JAL’s public mea culpa and cooperation with the commission’s ongoing investigation, the high court waived 35 percent of JAL’s original fine, according to a press release.

Along with JAL, the commission has worked to get 12 other carriers charged with price-fixing, violations that allegedly occurred for more than six years. In March, British Airways, Cargolux and Qantas Airways agreed to plead guilty to the high court’s charges, with BA and Cargolux fined a total of $NZ7.6 million; Qantas was reportedly slapped with a more than $NZ6 million fee.

The high court is slated to finish bringing its cases against Air New Zealand; Cathay Pacific Airways; Emirates; Korean Air Lines; Malaysian Airlines; Singapore Airlines Cargo, as well as Singapore Airlines; and Thai Airways International in March 2013. It dropped its proceedings against PT Garuda Indonesia, United Airlines and six Air New Zealand executives in April 2011.

The New Zealand high court isn’t the only Australasian government agency doling out fines for price fixing, however. Two weeks ago, the Federal Court in Sydney fined Malaysia Airlines Cargo AUS$6 million for engaging in price fixing over a four-year period. This fine followed an action by the Australian Competition and Consumer Commission.

According to an ACCC press release, Malaysia Airlines Cargo conspired to set security surcharges between October 2001 and October 2005; fixed fuel surcharges between April 2002 and September 2005; and conspired to set Customs fees between May 2004 and October 2005. The ACCC brought the charges against Malaysia on April 9, 2010.

Cases against Singapore Airlines, Cathay Pacific, Emirates, Air New Zealand and Thai Airways are ongoing. But the ACCC, Australia’s consumer watchdog, has already seen AUS$58 million in fees imposed against members of the cartel. In 2008, the commission saw price fixing fines levied against Qantas and British Airways. In February 2009, the ACCC saw Air France-KLM hit with a AUS$6 million fine, and Martinair and Cargolux fined AUS$5 million each.

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