International airlines fined after admitting price fixing on New Zealand cargo

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International airlines fined after admitting price fixing on New Zealand cargo

WELLINGTON, July 27 (Xinhua) -- Two international airlines were fined a total of 5 million NZ dollars (4.01 million U.S. dollars) by a New Zealand court Friday after they admitted price fixing on cargo flown into the country.

At the High Court in Auckland, Korean Air Lines Co. Ltd. ( Korean Air) was ordered to pay 3.5 million NZ dollars and Emirates 1.5 million NZ dollars for breaches of New Zealand's Commerce Act, according to the Commerce Commission.

Korean Air had admitted liability in the Commerce Commission's air cargo price fixing case for agreeing fuel and security surcharges in Hong Kong, Japan and Malaysia for cargo flown to New Zealand, said a statement from the commission.

Emirates admitted liability for agreeing fuel and security surcharges in Indonesia for cargo flown to New Zealand.

The penalties, which were recommended to the court by both the Commerce Commission and the airlines are part of pre-trial settlements, said the statement.

The penalties included a 33-percent discount to recognize Korean Air's admissions and its commitment to co-operate with the commission's case and a 25-percent discount to recognize Emirates' early admissions.

The settlements brought the number of airlines that had settled with the commission in the case to six, with penalties totaling 21. 37 million NZ dollars.

The commission had also settled with British Airways plc, Cargolux International Airlines S.A., Qantas Airways Ltd. and Japan Airlines Co Ltd..

"The commission is pleased to have settled with two more airlines in this significant case," Commerce Commission chair Dr. Mark Berry said in the statement.

"In this instance we have obtained admissions of liability, and penalties that should be a deterrent to others who might breach the Commerce Act."

Korean Air and Emirates were among 13 airlines in proceedings filed by the commission in 2008, alleging that the airlines colluded to impose fuel and security surcharges for air cargo shipments into and out of New Zealand.

Korean Air's conduct occurred over a period of six years, while Emirates' conduct occurred over three years, said the statement.

The case against the defending airlines was scheduled to continue in the High Court in Auckland in March next year.

At a first-stage hearing in August last year, the Commerce Commission successfully argued there was a "market in New Zealand" for the inbound air cargo services, confirming the New Zealand High Court's jurisdiction to hear the case in full.

The remaining defending airlines were Air New Zealand Ltd., Cathay Pacific Airways Ltd., Malaysian Airlines System Berhad Ltd., Singapore Airlines Cargo Pte Ltd. and Singapore Airlines Ltd., and Thai Airways International Public Company Ltd..

In April last year, the commission discontinued proceedings against PT Garuda Indonesia, United Airlines Inc. and six Air New Zealand executives.

In February this year, the commission discontinued against two Qantas executives.

Under New Zealand law, companies found guilty of price fixing can be fined up to 10 million NZ dollars or three times the value of any commercial gain resulting from the contravention or 10 percent of the turnover of the body corporate and all of its interconnected bodies corporate. Enditem

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