Airlines pay price for collusion on fuel surcharge but Qantas not out of the woods
With US and British authorities having imposed record fines totalling almost $1 billion on British Airways and Korean Air for collusion on fuel surcharges, a report in The Age form AAP and The Guardian says that the Australian competition watchdog says Qantas remains the subject of an investigation into price fixing.
The US Department of Justice also has Qantas on its radar after issuing the airline with a subpoena in May last year as part of its investigation into alleged price fixing in air cargo.
This week, the US Government issued the country’s second-biggest fine, slugging British Airways and Korean Air $US300 million ($A352 million) each after the pair admitted having conversations with rivals about fuel surcharges on long-haul flights.
The British Office of Fair Trading also fined British Airways £121.5 million ($A289 million). It found that the airline’s employees had as many as six conversations with Virgin Atlantic, after which the two airlines unveiled a matching increase in surcharges.
Virgin Atlantic escaped punishment after being granted conditional amnesty for providing information on the price-fixing cartel.
But the reprieve may only be temporary because British Airways and Virgin Atlantic could be hit with a £300 million class action brought by passengers who were forced to pay the inflated ticket prices.
Qantas, along with six other airlines, was served with a $200 million class action in Australia’s Federal Court in January for allegedly inflating air-freight prices.
Following the subpoena from the US Department of Justice, Qantas conducted a detailed review of its cargo operations to see if it had complied with the law.
In February, the airline issued a statement saying: “During this investigation, Qantas learned that the practice adopted by Qantas Freight and the cargo industry generally to fix and impose cargo fuel surcharges is likely to have breached relevant competition laws.”
Qantas said yesterday it was still six months from being able to “quantify any direct or indirect liability associated with these matters”.
Shaw Stockbroking aviation analyst Brent Mitchell said he did not believe that collusion between Australian airlines was widespread.
An Australian Competition and Consumer Commission spokeswoman said she could not say when the Qantas investigation would be completed.
Company bosses could also be jailed in future for price fixing under laws the Government will introduce, the changes making it a criminal offence to form cartels meaning bosses could be jailed for up to five years and fined $220,000.
Corporations could be fined $10 million, or three times their profit from an illegal arrangement. Cartel conduct is now a civil breach of the law.
The changes follow the recommendations of the Dawson review into competition law, which the Government first said it would accept in April 2003.
The legislation will be introduced into Parliament’s spring sitting that begins next week.
Report by The Mole
John Alwyn-Jones
Vegas’s Billion-Dollar Secrets – What They Don’t Want Tourists to Know
Visit Florida’s New CEO Bryan Griffin Shares His Vision for State Tourism with Graham
Chicago’s Tourism Renaissance: Graham Interviews Kristin Reynolds of Choose Chicago
Graham Talks with Cassandra McCauley of MMGY NextFactor About the Latest Industry Research
Destination International’s Andreas Weissenborn: Research, Advocacy, and Destination Impact
Graham and Don Welsh Discuss the Success of Destinations International’s Annual Conference
Graham and CEO Andre Kiwitz on Ventura Travel’s UK Move and Recruitment for the Role
Brett Laiken and Graham Discuss Florida’s Tourism Momentum and Global Appeal
Graham and Elliot Ferguson on Positioning DC as a Cultural and Inclusive Global Destination
Graham Talks to Fraser Last About His England-to-Ireland Trek for Mental Health Awareness
Kathy Nelson Tells Graham About the Honour of Hosting the World Cup and Kansas City’s Future
Graham McKenzie on Sir Richie Richardson’s Dual Passion for Golf and His Homeland, Antigua
ADS PRO 
Phocuswright reveals the world's largest travel markets in volume in 2025
Cyclone in Sri Lanka had limited effect on tourism in contrary to media reports
Higher departure tax and visa cost, e-arrival card: Japan unleashes the fiscal weapon against tourists
Singapore to forbid entry to undesirable travelers with new no-boarding directive
In Italy, the Meloni government congratulates itself for its tourism achievements