Qantas Airways agrees to plead guilty to price fixing

SYDNEY — Qantas Airways Ltd., Australia’s biggest airline, agreed to pay a $61 million criminal fine and plead guilty to participating in a global conspiracy to fix rates for international air cargo shipments, the US government said.

By (Bloomberg)

Published: Thu 29 Nov 2007, 8:24 AM

Last updated: Sat 4 Apr 2015, 11:23 PM

The Justice Department said yesterday Qantas will cooperate with the government’s investigation of the price-fixing conspiracy.

Qantas’s agreement to plead guilty “sends a clear message that those who engage in price fixing and other forms of illegal collusion will pay a heavy price for their crimes,” Thomas O. Barnett, the Justice Department’s antitrust chief, said in a statement.

Qantas conspired with other airlines to fix cargo rates from January 2000 to February 2006, the government charged in court papers. During this period, Qantas was the largest hauler of air cargo between the US and Australia, earning more than $600 million.

The guilty plea will subject Qantas to civil lawsuits in US courts by customers who can seek three times the amount they were overcharged as a result of the conspiracy. In a statement, Geoff Dixon, Qantas’s chief executive officer, said neither the fine nor “any further financial penalties will materially affect future operating results.”

More than 30 airlines are under investigation, he said.

The investigation “confirmed that knowledge of the conduct was confined within the Qantas Freight Division,” Dixon said. “The conduct was wrong and we apologise unreservedly for this.”

British, Korean airlines: The probe has already netted guilty pleas from British Airways Plc, Europe’s third-biggest airline, and Korean Air Lines Co., which each paid $300 million fines for participating in conspiracies to fix passenger and cargo rates.

The judge at their August 23 sentencing said that British Airways and Korean Air Lines could have been fined two to three times as much if they had not agreed to cooperate with the investigation.

US and European authorities are investigating at least 11 other passenger and air cargo carriers, including AMR Corporation’s American Airlines, Air France-KLM Group and Japan Airlines Corporation Virgin Atlantic Airways and Deutsche Lufthansa AG, Europe’s second-biggest airline, won’t be prosecuted because they reported participating in the price-fixing conspiracies, the Justice Department said August 1 when it announced the first two plea agreements.

Virgin Atlantic told authorities about collusion with British Airways to fix passenger fares, and Deutsche Lufthansa reported it had set air cargo rates with British Airways and Korean Air Lines, the agency said.

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