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A Qantas plane - Source: ONE News -
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The High Court has ordered Qantas to pay a $6.5 million for price fixing.
The penalty is the highest ever handed down in New Zealand.
It was recommended to the court by both the Commerce Commission and Qantas as part of a pre-trial settlement in the air cargo cartel case.
At the same time in another courtroom the Commission was opening its case in the first stage of the cartel proceeding in which the Commission alleges that a number of international airlines colluded to raise the price of freighting cargo.
Cartels are groups of businesses or executives who, instead of competing against each other to offer the best deal, secretly agree to work together and keep prices high.
The Judge noted that the starting point for the penalty was $13 million, with a 50% discount for Qantas' high level of co-operation with the Commission's investigation.
"When parties admit breaches of the Act early and co-operate with the Commission's investigation there are significant benefits for them, and it is in the public interest, since court hearings can be a costly and drawn-out way of resolving matters," said Commerce Commission General Counsel for Enforcement, Mary-Anne Borrowdale.
"It is appropriate to recognise that Qantas admitted its price fixing at the very earliest opportunity, and is providing genuine assistance with the Commission's case against the defending airlines."
In his judgment Justice Allan noted this..."As soon as the nature and scale of the problem came to the notice of Qantas senior management and its Board, the Commission was advised that Qantas would co-operate in every respect.
"It has continued to do so over a significant period. In particular, it has proactively provided extensive evidence and documents detailing the collusive FSU (Fuel Surcharge Understanding) and its own participation in that FSU."
The Judge also noted that Qantas has committed to making its staff available as witnesses in the cartel case against the defending airlines.
The Qantas penalty brings the amount achieved in settlements of the cartel case to $14.1million. The Commission has also settled with British Airways plc and Cargolux International Airlines S.A.
Air New Zealand Limited is among the airlines still trying to defend charges.