Qantas fined for price fixing

December 11, 2008
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, SYDNEY, December 11 – Australia\’s national airline Qantas was Thursday fined 20 million dollars (13.1 million US) after admitting it engaged in price fixing linked to international cargo fuel surcharges.

An Australian federal court in Sydney also fined British Airways five million dollars after it admitted an illegal arrangement in the airfreight market over the same time period with Germany\’s Lufthansa.

Qantas had in October agreed to pay the penalty to settle the case brought against it by the country\’s competition watchdog.

The Australian Competition and Consumer Commission (ACCC) had brought the claim against Qantas and British Airways, which began merger talks earlier this year, seeking penalties over fuel surcharges on cargo from 2002 to 2006.

The penalties sent a strong message to cartels, said ACCC chairman Graeme Samuel.

"Cartels — particularly those that are engaged in by large businesses with broad application over a period of time — have a significant effect on consumers," he said.

"They are an unseen fraud on the community that must be uncovered and punished."

Qantas admitted striking "understandings" with other airlines over the cargo fuel surcharges, but said earlier that the price fixing did not relate to its passenger services.

The Australian flag carrier had undertaken an exhaustive probe of the incidents after being made aware of the conduct, Samuel said.

Both Qantas and British Airways have been restrained from engaging in similar conduct for three years and ordered to pay 200,000 dollars each towards the legal costs of the ACCC.

Qantas\’ former chief executive Geoff Dixon in October apologised "unreservedly for the conduct of the employees involved" in the price fixing incident.

Foreign regulators have recently brought a number of cases against airlines in relation to cartel conduct involving air freight.

In November 2007 Qantas apologised for engaging in price-fixing activity on cargo in the United States and agreed to pay a 61 million US dollar fine after an investigation by the US Justice Department.

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