Commission drops charges against Air NZ cargo execs

The Commerce Commission says it is focusing its case on those airlines with large turnover in New Zealand markets. Photo / Supplied

Proceedings have been dropped against six Air New Zealand executives by the Commerce Commission as part of an air cargo cartel case.

The case continues against Air New Zealand itself.

The commission said it filed the discontinuances yesterday, which also included against PT Garuda Indonesia, as it refined its case leading up to the first hearing next month.

Commission general counsel of enforcement, Mary-Anne Borrowdale, said: "Discontinuing against these parties is part of the commission's overall strategy to streamline and focus the case on those airlines with large turnover in New Zealand markets."

The commission said its case alleging airlines colluded to raise the price of freighting cargo continued against Air New Zealand, Cathay Pacific Airways, Emirates, Japan Airlines International, Korean Air Lines, Malaysian Airlines System Berhad, Singapore Airlines Cargo and Singapore Airlines, and Thai Airways International Public Company.

Air New Zealand said it welcomed the decision to discontinue proceedings against employees of its cargo business.

Air New Zealand General Counsel John Blair said: "This has been an incredibly stressful period in the lives of our people, and I have been saddened to see the needless impact it has had on these hard-working employees, not to mention the millions of dollars of taxpayers' funds spent to get to this point.

"We have maintained from the start of the commission's investigation more than five years ago that neither the airline nor our employees had committed any breach of the Commerce Act and we remain firmly of that view," Blair said.

"The commission has yet to produce any evidence to the contrary despite the enormous resources it has deployed."

The NZX-listed airline said it had successfully defended its position and practices at the European Commission after a probe into the cargo activities of 22 airlines, with no finding of any wrongdoing against the company.

The carrier, which is 74.7 per cent Government-owned, said it was also cleared last year after an investigation by the Korean Fair Trade Commission.

The Commerce Commission said it started proceedings in 2008 against 13 international airlines and eight executives alleging the carriers had colluded to raise the price of freighting cargo by imposing fuel surcharges on shipments in and out of New Zealand.

The two airline executives remaining as part of the case are not employees of Air New Zealand.

The commission last month said Qantas Airways, British Airways and Cargolux International Airlines had agreed settlements, which involved admitting liability and paying penalties.

The High Court in Auckland this month imposed penalties against Cargolux International Airlines and British Airways of $6 million and $1.6 million respectively.

The commission and Qantas had agreed to recommend the court impose a penalty of $6.5 million. The court judgment is pending. Air New Zealand shares closed steady at $1.10 yesterday.

CARTEL CASE

The New Zealand Commerce Commission started proceedings against 13 international airlines in December 2008, alleging the carriers colluded to raise the price of freighting cargo by imposing fuel surcharges on cargo shipments into and out of New Zealand.

SETTLED

Qantas, British Airways, Cargolux International Airlines.

DROPPED

United Airlines, PT Garuda Indonesia.

DEFENDING

Air New Zealand, Cathay Pacific Airways, Emirates, Japan Airlines International, Korean Air Lines, Malaysian Airlines System Berhad, Singapore Airlines Cargo and Singapore Airlines, Thai Airways International Public.