QANTAS still does not know whether it will face fines worth hundreds of millions of dollars after being caught up in the freight price-fixing scandal that has already cost two other airlines almost $US850 million ($995 million).
US and British regulators sent shockwaves through the industry on Wednesday when they fined Qantas partner British Airways almost $550 million for colluding with competitors to fix passenger and freight fuel surcharges.
BA and Korean Air Lines were each fined $US300 million in a plea bargain with the US Justice Department to settle separate charges on the matter.
The British carrier reached a separate settlement with the UK's Office of Fair Trading, which involved a pound stg. 121.5 million ($288 million) fine.
But US Justice Department officials warned they had other airlines in the crosshairs.
They would not say which airlines were still being investigated, but they have raided the offices or asked for information at as many as 16, including Qantas.
Asked about a BA move to make a pound stg. 50 million provision for the case, Qantas chief executive Geoff Dixon said on Wednesday the airline still did not know where it stood.
"Obviously I can't comment on British Airways' situation. As you know, we had said there was a potential liability but we've not been able to quantify it as yet and we're still in discussions with a range of authorities on the whole issue," he said.
In May last year, the airline received a subpoena from the US Justice Department to produce documents as part of its price-fixing investigation.
It has also been targeted by other regulators, including the Australian Competition and Consumer Commission, the New Zealand Commerce Commission and the European Commission.
The airline admitted last year the practices adopted by Qantas Freight and the cargo industry generally were likely to have breached competition laws.
It said it was fully co-operating with regulators and was continuing to provide information to help with their investigations.
The airline has also been named in two lawsuits - one in the Australian Federal Court and another as part of a class action in New York.
The airline said in a target's statement issued during the private equity takeover bid earlier this year that it expected it would be at least 12 months until it was possible to quantify any direct or indirect liability associated with the matters.
This week's charges and pleas were the first to be brought in the long-running case. Some airlines have already settled court cases with disgruntled customers and Deutsche Lufthansa said it had paid $US85 million to settle some claims.
The British Airways and Korean Air plea agreements require court approval.
An ACCC spokeswoman said the regulator was unable to automatically impose fines but had to mount a Federal Court case. She said the ACCC had been looking at the allegations made overseas but any investigation it would make would be done so independently.
US reports said documents filed by the Justice Department said passengers flying on British Airways flights between Britain and the US paid more for their tickets as a result of the price fixing. In 2004, the fuel surcharge paid by passengers was about $10 a ticket; by the time the investigation broke up the cartel last year, the surcharge had increased to about $110 a ticket.
Between 2002 and 2006, British Airways' fuel surcharge on cargo shipments to and from the US rose from 4c a kilogram to as high as 72c a kilogram, or 1.8c a pound to about 33c a pound.
In Korean Air's case, the company conspired to fix fares targeted for ethnic Koreans in the US. Justice officials say the airline colluded with competitors to raise its cargo-fuel surcharge.
Source:
http://www.theaustralian.news.com.au/story/0,25197,22178855-23349,00.html Steven Creedy, Aviation Writer
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