Asian airlines fined in ‘20 per cent’ plot
SINGAPORE AIRLINES Cargo and Cathay Pacific have been fined A$23 million, after Singapore admitted to being part of a cartel to inflate the cost of flying meat to Australian troops in the Middle East.
Meanwhile, the Australian Competition and Consumer Commission’s (ACCC) case against Air New Zealand and PT Garuda Indonesia continues in the Australian Federal Court in Sydney.
The Australian Federal Court has ordered Cathay to pay $11.25 million and Singapore to pay $11.75 million as part of $91 million worth of fines that have been imposed on 12 airlines involved in the air-freight cartel. The global cartel originated in 1996 when at least 17 airlines, including Qantas, introduced freight levies on air cargo to offset rising fuel costs.
The ACCC said Singapore had attempted to strike a price-fixing arrangement with Malaysia Airlines on transporting meat after an announcement by the United States government in January 2003 to send 35,000 troops to the Middle East.
The Australian government also announced it would be sending additional Australian Defence Force personnel to assist in Iraq, which prompted Singapore Cargo’s regional vice-president in Australia to predict that ‘‘the build-up of US troops would lead to increased demand for the carriage by air of Australian meat to the Middle East’’, the regulator said.
‘‘I spoke to MH [Malaysian Airlines] and they cfm [confirm] their rate of $1.80 [per kilogram for the transport of meat to the Middle East],’’ the Singapore
Told MH [Malaysian airlines] we will up 20 per cent if they are prepared to do likewise. He is confident EK [Emirates] will follow.
individual. No arrangement was ever entered into. Singapore Airlines Cargo takes a serious view of the matter,’’ a spokesman said.
‘‘Subsequently, the individual concerned left the employment of Singapore Airlines Cargo,’’ he said.
Cathay Pacific separately admitted to trying to strike a price-fixing arrangement with Qantas, to increase the cost on 747 freighter flights to Hong Kong by 25 per cent to the same level as Cathay.
‘‘Had this attempt been successful, the price increase by Qantas on a fully laden freighter would have been more than $80,000 per week,’’ ACCC chairman Rod Sims said.
‘‘The sheer scale of these penalties will act as a strong deterrent to any business considering engaging in cartel conduct, regardless of size or country of origin.’’
The other airlines to be fined for cartel behaviour in Australia since 2008 include Emirates ($10 million), Air France-KLM ($6 million), Japan Airlines ($5.5 million) and British Airways ($5 million).
Qantas’ freight division was caught in a global price-fixing cartel in the early 2000s that cost the airline more than $200 million in fines and settlements.