Two airlines were fined in the High Court today, bringing the total penalties achieved by the Commerce Commission's air cargo price fixing case to more than $20 million.
The High Court at Auckland Court ordered Korean Air Lines and Emirates to pay penalties of $3.5m and $1.5m respectively for breaching the Commerce Act.
Korean Air admitted liability in the 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.
Emirates admitted to agreeing fuel and security surcharges in Indonesia for cargo flown to New Zealand.
The penalties imposed today were recommended to the court by both the Commission and the two airlines as part of pre-trial settlements.
"The Commission is pleased to have settled with two more airlines in this significant case.
"We are focussed on achieving the most effective resolution of cases. In this instance we have obtained admissions of liability, and penalties that should be a deterrent to others who might breach the Commerce Act," said Commission Chair Dr Mark Berry.
The settlements bring the number of airlines that have settled with the Commission in the case to six, and total penalties achieved to $21.375m.
The Commission filed proceedings against 13 airlines in December 2008, alleging that the airlines colluded to impose fuel and security surcharges for air cargo shipments into and out of New Zealand.
In 2006, air freight forwarding services in and out of the country generated $450m in revenue.
The case against the six remaining defending airlines is scheduled to continue in the High Court at Auckland in March next year.
The defending airlines are Air New Zealand Limited, Cathay Pacific Airways Limited, Malaysian Airlines System Berhad Limited, Singapore Airlines Cargo Pte Limited and Singapore Airlines Limited, and Thai Airways International Public Company Limited.
In April last year the Commission discontinued its proceedings against PT Garuda Indonesia, United Airlines Incorporated and six Air New Zealand executives. In February 2012 the Commission discontinued proceedings against two Qantas' executives.
Section 30 of the Commerce Act makes price-fixing agreements between competitors unlawful.
This includes agreements with the purpose, effect or likely effect of fixing, controlling or maintaining prices, or that provide a mechanism for doing so.
This can be a very informal agreement, or a formal document, such as a contract.
Commerce Commission spokeswoman Allanah Kalafatelis said the fines will go into the Government's consolidated fund and will be used to compensate any airlines affected by the cartel.
This week Parliament passed the first reading of legislation introducing criminal sanctions for cartels.
Emirates and Korean Air could not be reached for comment.
- By Brendan Manning of APNZ/Additional reporting by BusinessDesk
