16 Dec 2008

Exporters shocked at air freight fixing allegations

9:39 am on 16 December 2008

New Zealand exporters are expressing surprise and shock over allegations of airfreight price fixing.

The Commerce Commission is taking legal action against 13 airlines, including Air New Zealand and Qantas, which it claims colluded to raise the price of freight by imposing fuel surcharges over more than seven years.

Tauranga-based flower exporter Andy Warren said if the allegations are true, exporters have been disadvantaged.

Mr Warren, who owns the company Bloomz, said the distance to world markets already makes things difficult for exporters.

He said if there was collusion between airlines, it would no doubt have affected how competitive exporters were with their prices.

The Fiordland Lobster Company airfreights about 2000 tonnes of live rock lobster annually.

Its chief executive Michael Schuck believes the Commerce Commission would not be bringing this case unless it thought there was something to it.

New Zealand Natural Exports managing director David Easton said he negotiates his own freight rates with the airlines, and has found the rate to be negotiable. He said he would be surprised if the allegations were true.

New Zealand King Salmon Company sales and marketing general manager Don Everitt said they have had a good relationship with Air New Zealand for many years. Mr Everitt said he would like to find out if the allegations were true.

Air New Zealand's lawyer, John Blair, says the airline has conducted an investigation and found no evidence that it was part of a cartel.

Previous penalties

Overseas authorities have also been investigating the air cargo market and Qantas has already been fined in Australia and the United States.

On 11 December, the Federal Court of Australia ordered Qantas to pay $A20 million for breaching price-fixing provisions of the Trade Practices Act.

The airline had agreed to the fine when the Australian Competition and Consumer Commission began legal action in October.

Qantas admitted "understandings" with other airlines on fuel surcharges relating to air cargo between 2002 and early 2006.

The airline said at the time the price fixing did not relate to its passenger service.

On Thursday, the federal court also fined British Airways $A5 million after the airline admitted an illegal arrangement in the airfreight market, during the same time period, with Lufthansa.