Qantas has agreed to pay a $20 million fine to the competition watchdog after it was caught in a price fixing scheme with British Airways in the air frieght market.
Qantas has agreed to pay a $20 million fine to the competition watchdog after it was caught in a price fixing scheme with British Airways in the air frieght market.
The Australian Competition and Consumer Commission (ACCC) is taking separate actions against the pair in the Federal Court in Sydney.
It is seeking penalties for alleged price fixing by the airlines between 2002 and early 2006.
The alleged contraventions relate to fuel surcharges applied to international carriage of air cargo during that period.
"The airlines are the first to be proceeded against in Australia because both came forward and voluntarily made admissions under the ACCC's cooperation policy," ACCC chairman Graeme Samuel said.
The ACCC continues to investigate other airlines, some of which are assisting voluntarily.
"The ACCC expects to be able to resolve its investigations with other cooperating airlines shortly," he said.
The ACCC said Qantas and British Airways have reached agreement as to the penalties.
"The recommended penalties reflect the serious nature of the cartel contraventions and, in the case of Qantas, its very large share of the Australian segment of the market," Mr Samuel said.
"However, they also reflect the parties' high and continuing cooperation in the ACCC's investigation."
Other legal orders to be sought in each case, with the consent of the parties, include injunctions and a contribution to the ACCC's costs.
A directions hearing has been set down for 30 October 2008 before Justice Jacobson.
Overseas regulators have bought a number of actions related to cartel conduct by international airlines.
The US Department of Justice recently reached settlements with a number of airlines.
Qantas chief executive Geoff Dixon later said the airline had agreed to a financial penalty of $20 million to settle its liability resulting from price fixing conduct in its freight division.
"Qantas apologises unreservedly for the conduct of the employees involved," he said in a statement.
"All Qantas employees are expected to comply with the law and we take any failure to comply very seriously.
"Since being advised of the allegations in May 2006, Qantas has cooperated fully with investigations by the ACCC and all other relevant antitrust regulators."
Mr Dixon pointed out that Qantas had moved to settle the issue early while other similar investigations in Europe are expected to take two years to complete.
"Qantas will continue to cooperate with the ACCC and other antitrust regulators on these investigations," he added.
Mr Dixon said that the illegal conduct involved the imposition of fuel surcharges in the international air cargo market between 2000 and 2006.
The surcharge was imposed by Qantas and other airlines pursuant to a recommendation by the International Air Transport Association (IATA).
"Anti-trust immunity was sought by IATA for industry-wide imposition of the same surcharge," Mr Dixon said.
"The immunity was subsequently refused.
"However, the industry continued to impose the surcharge."
Mr Dixon said the conduct within Qantas did not involve the company's passenger business.