Key hearing for Air NZ on surcharges

Airline facing other legal action overseas.

Airlines have paid billions of dollars in fines and costs in other countries and some airline executives have been jailed. Photo / Martin Sykes
Airlines have paid billions of dollars in fines and costs in other countries and some airline executives have been jailed. Photo / Martin Sykes

Air New Zealand faces continued action over air freight surcharges in other countries as the long-running case brought by the Commerce Commission here reaches a key stage this week.

The airline faces a penalty hearing in the High Court on Friday, after a case against 13 carriers by the commission which has resulted in penalties of $35 million being imposed on several carriers.

A hearing involving Air New Zealand was set for Monday but adjourned and those proceedings are now subject to a court-imposed confidentiality order. It is possible the airline could file further papers before Friday's hearing in the case which it has vociferously defended since it was launched, when it accused the commission of "grandstanding" to justify its existence.

The commission said airlines operating out of New Zealand had skimmed up to $600 million from freight customers. The action here stemmed from raids by regulators on airlines around the world in 2006 following allegations they colluded to increase freight charges and impose a security surcharge after the 2001 terror attacks in the United States.

Since then airlines have paid billions of dollars in fines and costs in other countries and some airline executives have been jailed.

Air New Zealand has said previously it has spent millions of dollars on internal investigations that had not found any evidence of price fixing or cartel behaviour and had given hundreds of thousands of documents to the commission.

Action by the commission against six Air New Zealand executives was dropped in 2011 and no action was taken against the airline in the United States and Europe after extensive investigations.

In this country last month the High Court ordered three other airlines to pay a combined total of $9.6 million in penalties, leaving Air New Zealand the only carrier involved in court action here.

Across the Tasman Air New Zealand still faces action 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.

In its interim report in February Air New Zealand said it had been named in four class actions overseas and all were being defended.

Penalties in NZ to date

* Qantas $6.5m
* British Airways $1.6m
* Cargolux $6m
* Japan $2.285m
* Korean $3.5m
* Emirates $1.5m
* SIA Cargo $4.1m
* Cathay $4.3m
* MASkargo $2.6m
* Thai $2.7m
$2.8m Commerce Commission court and investigation costs.

- NZ Herald

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