21 Apr 2011

Commission ends part of air cargo legal action

7:34 am on 21 April 2011

The Commerce Commission has ended legal action against six Air New Zealand executives and airline Garuda Indonesia over alleged involvement in fixing prices among air cargo carriers.

Nine airlines, including Air New Zealand, still face legal action over claims of collusion to raise the price of freight by imposing fuel surcharges for more than seven years.

The number of airlines and executives facing legal action from the Commerce Commission over alleged price-fixing in the air cargo market has narrowed since the process started in late 2008.

Last month, the Commission dropped proceedings against United Airlines, while British Airways, Cargolux International and Qantas have or will pay fines to settle the case.

Now, Garuda and six Air New Zealand executives have been dropped, and the Commission says the decision to end the prosecutions reflects its focus on airlines with large turnover in New Zealand markets.

That leaves eight airlines, including Air New Zealand, Cathay Pacific, Emirates, and Singapore Airlines and two executives, still facing action.

Air New Zealand welcomed the decision, saying it's been very stressful for its employees, but it remains defiant, arguing it hasn't done anything wrong and the regulator has not produced any evidence to show otherwise.

Globally, regulators have cracked down on cartel behaviour involving air cargo, and many airlines have been fined.

Air New Zealand says it been cleared of wrongdoing by regulators in Europe and Korea, though it still faces action in Australia.

The first hearing into the price-fixing claims starts next month.