$7.5m fine for Air NZ urged

The Commerce Commission has recommended a $7.5 million fine for Air New Zealand in its price-fixing case before the High Court.

A decision on the case has been reserved in the High Court in Auckland this morning.

Air NZ was the only one of 11 airlines holding out against the commission in the air-cargo case. The other 10 have admitted their role and paid combined penalties of $35 million.

The commission alleged that the airlines colluded to impose fuel and security surcharges for air cargo shipments to and from New Zealand.

While Air NZ and the regulator had reached a settlement agreement earlier this year, the airline then made an 11th hour bid to cancel the deal.

But in a joint statement from the parties this week, Air NZ agreed to settle.

"Air New Zealand has withdrawn its proceeding challenging the settlement agreement in the air cargo proceeding and will pay costs to the commission in relation to the settlement of this dispute," the statement said.

"The parties have agreed a basis for settling the proceedings. There will now be a penalty hearing and the parties are seeking the earliest available date for that hearing."

In April, the High Court ordered three more airlines to pay a combined total of $9.6 million in penalties for their role in the case.

According to the commission, it received penalty judgments against Cathay Pacific Airways for $4.3 million, Thai Airways International for $2.7 million, and MASkargo System Berhad for $2.6 million for price fixing in breach of the Commerce Act.

The commission said it had previously received penalties from seven other airlines: British Airways, Cargolux Airlines International, Emirates, Japan Airlines International Co, Korean Air Lines, Qantas Airways, and Singapore Airlines Cargo.

Air NZ is still facing action across the Tasman by the Australian Competition and Consumer Commission, which alleges that between 2002 and 2006 it entered into arrangements or understandings with other international air cargo carriers that had the purpose or effect of fixing the price of a fuel surcharge and a security surcharge that were applied to air cargo.

- Jamie Gray, APNZ business reporter

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