NEW ZEALAND: SIA, Cathay vow to fight prosecution

Three more airlines caught up in the global price fixing scandal say they will contest criminal charges brought against them by New Zealand’s Commerce Commission. Singapore Airlines Cargo, Cathay Pacific Airways and Aerolineas Argentinas are being investigated for allegations of price-fixing and anti-competitive behaviour in the air cargo industry. The trio have been accused of […]


Three more airlines caught up in the global price fixing scandal say they will contest criminal charges brought against them by New Zealand’s Commerce Commission.

Singapore Airlines Cargo, Cathay Pacific Airways and Aerolineas Argentinas are being investigated for allegations of price-fixing and anti-competitive behaviour in the air cargo industry. The trio have been accused of not providing information requested by the Commission.

The commission is investigating allegations that airlines, including Air NewZealand, colluded for years in setting cargo rates, including fuel surcharges, in the NZ$400 million New Zealand international air-freight market.

The New Zealand investigation is part of a global action involving jurisdictions including the United States, Europe and Australia – and over 30 airlines.

Several airlines have paid out US$1.2billion in penalties in the US, including Qantas which paid US$61 million in November and has made provisions for another A$64 million to cover actions in Australia, New Zealand and Europe.

Commission chairwoman Paula Rebstock said the latest three airlines under investigation could not refuse the request made last in October under the Commerce Act to provide the information within a month. The airlines face fines of up to $30,000 each if found guilty.

Singapore Airlines Cargo and Cathay Pacific both said they had provided all documentation relating to their NewZealand operations, but that the commission was exceeding its jurisdiction by also demanding information on operations inother countries.

Hong Kong’s Cathay Pacific said it was disappointed and concerned by the commission’s decision to involve it in a test case seeking extra-territorial investigativen and judicial powers.

Singapore Airlines Cargo said the commission’s request would require the airline to provide information from 39 countries.

“SIA Cargo has not sought to impede the Commerce Commission’s investigationin any way,” according to a statement from the airline.

SIA Cargo expressed its disappointment about NZCC’s actions and has confirmed that it will “vigorously defend” itself against the charges of wrongful non-compliance.

“SIA Cargo has answered all aspects of the notice relating to its New Zealand-based operations. It has also made available officers to assist the NZCC with its investigation and is cooperating,” the company added.

The company has insisted that information about its operations outside NewZealand transcended the jurisdiction ofthe NZCC and has raised the possibility of seeking a judicial review.

“SIA Cargo believes those aspects ofthe notice asked more of it than the law requires, and are invalid,” it continued.

The criminal charges filed by the Commission relate to alleged non-compliance with statutory notices issued under the Commerce Act in October 2007.

The notices required that the airlines provide documents and information to the Commission by a specified date in November 2007.

The Commission says statutory notices are a key investigative tool used to gather evidence in its investigations of potential breaches of the Commerce Actincluding alleged cartel activity.