Friday, March 18, 2011

Air Freight Carriers Hit Once Again In Fuel Surcharge Prosecution

Latest Round of Cartel Fines - With More to Come
Shipping News Feature

NEW ZEALAND - Anti trust authorities around the globe continue to reap rich rewards from the misdemeanours of air freight shipping groups committed in the past decade. After collecting almost a billion euros and one and a half billion dollars in Europe and the USA from a who’s who of airlines in the past two years, prosecutions continue to hit the big air logistics groups in the pocket for perceived cartel operations. Today saw three airlines fined after admitting anti trust offences whilst the prosecution of another was dropped.

Today saw three well known carriers penalised by New Zealand’s competition regulator after their admission of collusion over fuel surcharges on which they had conspired. Qantas have accepted a penalty of NZ$6.5 million for the offences committed over a six year period from the turn of the century. British Airways and Cargolux have also been fined, as yet undisclosed amounts and these penalties follow those imposed on Geologistics and EGL totalling NZ$3.65, the complete history of which we detailed in a previous article.

Cargolux announced in January that it would be appealing against the European Commissions penalty along with ten other air freight carriers also fined last year for anti trust activities. The airline was fined €79.9 million out of a total amount of €799.4 million in November.

Meanwhile the New Zealand authorities continue to pursue prosecutions against Singapore Airlines and Singapore Airlines Cargo, Japan Airlines, Korean Air, Malaysian Airlines, Emirates, Cathay Pacific, PT Garuda (Indonesia) and Air New Zealand, which quadrupled year on year profits last June and which is protesting its innocence to anyone who will listen having avoided a fine in Europe and with an American case pending. A proposed case against United Airlines was dropped today by the authorities but ominously for those still accused their three recently fined competitors have agreed to continue cooperating with the regulator in the ongoing investigation.

The three penalised airlines are believed to have been billed with an amount which is 50% of what the fine would have been had they not admitted the offences and then found guilty. The anti trust authorities may well feel they have discovered a rich new vein of profit, the New Zealand regulators are actively investigating whether they can pursue cases which have occurred overseas. Onlookers may wonder if the recovered funds should not be redistributed to those consignors who paid the excess charges but this will normally be left to a class action by overcharged clients as has been seen in the US, Australia and Europe. The New Zealand Commerce Commission said in a statement:

“The Commission is preparing to test whether it can pursue price-fixing conduct that occurs overseas. We need to know whether deliberate collusion overseas, to affect New Zealand markets, is something that we can take enforcement action against. Our efforts to streamline and focus the case have that central issue in mind.”