Air NZ to fight US case

European and US regulators dropped their claim against Air New Zealand. Photo / Greg Bowker

National carrier plans to defend class action alleging price fixing.

Air New Zealand will defend a multi-billion-dollar class action in the United States alleging it colluded to fix prices on international air freight services after a New York court set a trial date for the claim.

The Auckland-based airline, Air China and Air China Cargo, Air India, and Polar Air Cargo and its parent Atlas Air Worldwide failed in an application to end the claim this week after a hearing in the US District Court. Judge John Gleeson set a final pre-trial hearing for January 8, 2016, with jury selection and the trial to start on January 25.

The claim, led by global litigation firm Hausfeld, was filed in 2006 on behalf of six freight forwarders.

Hausfeld has reached settlements worth almost US$1.04 billion ($1.6 billion) with 27 airlines, including Qantas, which paid US$26.5 million.

The biggest settlement was US$115 million with Korean Air. The plaintiffs estimate damages at about US$2.66 billion, which would triple to as much as US$7.98 billion under US antitrust laws.

"Any defendants found liable would be jointly and severally responsible for the full amounts, plus fees and costs, less settlements received from other defendants," said Hausfeld lawyer Brent Laundau.

The freight forwarders allege the airlines "conspired to develop and implement an industry-wide index for calculating fuel and security surcharges that were applied to thousands of routes flown worldwide by the defendants, including flights to and from the United States", and were able to adjust those rates 28 times between January 1, 2000, and September 30, 2006, according to a report and recommendations by US Magistrate Judge Viktor Pohorelsky in the US District Court last October.

The alleged price-fixing has been the subject of antitrust actions around the globe, with big settlements from multinational airlines in Europe and the US. In New Zealand, the Commerce Commission reached settlements with 11 carriers, including Air New Zealand, securing penalties totalling $45 million, or about 10 per cent of the revenue generated from air freight-forwarding services in and out of New Zealand in 2006.

Air NZ has avoided prosecution in other jurisdictions, with European and US regulators dropping their claim against the airline, while the Australian Federal Court tossed out legal action against it last year, a decision now under appeal. The airline was also excluded from a class action deal in Australia and clawed back legal fees.