Air New Zealand to Defend US Class Action over Air Cargo Cartel Claim

Strategic Insights -

Air New Zealand, along with other airlines, will defend a class action lawsuit in the US, alleging that they colluded to fix prices on international air freight services. The lawsuit, filed in 2006 on behalf of six freight forwarders, claims damages of around $2.66 billion, which could treble to as much as $7.98 billion under US antitrust laws. The trial date has been set for January 25, 2016, following a hearing in the US District Court for the Eastern District of New York.

Key Takeaways:

  • The lawsuit alleges that the airlines conspired to develop and implement an industry-wide index for calculating fuel and security surcharges, allowing them to adjust those rates 28 times between January 1, 2000, and September 30, 2006.
  • The plaintiffs estimate damages at around $2.66 billion, which could treble to as much as $7.98 billion under US antitrust laws.
  • The alleged price-fixing has been the subject of antitrust actions around the globe, with big settlements from multinational airlines in Europe and the US.
  • In New Zealand, the Commerce Commission reached settlements with 11 carriers, including Air New Zealand, securing penalties totaling $45 million, or about 10 percent of the revenue generated from air freight forwarding services in and out of New Zealand in 2006.
  • Air New Zealand has been cleared by regulators or courts of involvement in cartel conduct in the US, Europe, and Australia, but will continue to defend this civil claim.
  • The airline has reached settlements worth almost $1.04 billion with 27 airlines, including Qantas Airways, which paid $26.5 million, and Korean Air, which paid $115 million.
  • Hausfeld, the global litigation firm leading the claim, has also secured settlements with SAirGroup, Cathay Pacific, and Singapore Airlines.

Statistics:

  • The lawsuit claims damages of around $2.66 billion.
  • The alleged price-fixing resulted in 28 adjustments to fuel and security surcharges between January 1, 2000, and September 30, 2006.
  • The Commerce Commission in New Zealand reached settlements with 11 carriers, securing penalties totaling $45 million.
  • The settlements reached by Hausfeld with 27 airlines total almost $1.04 billion.

Sources:

  • BusinessDesk - By Paul McBeth Sept. 3.
  • US District Court for the Eastern District of New York.
  • Hausfeld global litigation firm.
  • Commerce Commission in New Zealand.