$40 million fine for Qantas??
Qantas sets aside $40 million to cover possible US DOJ price-fixing fine
Airline Transport World
Tuesday August 14, 2007
Qantas has set aside $40 million "to cover a potential fine that may be imposed" by the US Dept. of Justice as part of the international investigation into price-fixing.
The carrier previously admitted it is under investigation in multiple jurisdictions regarding "price-fixing in the air cargo market" related to surcharges. "These investigations revealed that the practice adopted by Qantas Freight and the cargo industry generally to fix and impose fuel surcharges was likely to have breached relevant competition laws," CEO Geoff Dixon said yesterday. "To date, it has not been possible to quantify any direct or indirect liability associated with these matters." He conceded that a "small number" of QF employees engaged in "unacceptable conduct" that made it possible the airline would have to pay fines.
Dixon explained that QF decided to put the money aside following guilty pleas earlier this month by British Airways and Korean Air related to price-fixing on fares and surcharges on both passenger and cargo flights. Those pleas led to the imposition of a combined $800 million in fines by DOJ and, in the case of BA, also by the UK Office of Fair Trading (ATWOnline, Aug. 2).
"At this stage, it is too early to make a reliable estimate of possible fines in [jurisdictions other than the US] or of possible liability to third parties under class actions," Dixon said. "We expect these amounts will be known over the next two years." He said Qantas had investigated the matter thoroughly and was "confident" the misconduct was "limited" to a small group of employees.
by Aaron Karp