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Thu, Nov 29, 2007 - Page 10 News List

Qantas apologizes for price-fixing, will pay US$61m

AFP , SYDNEY

Australian airline Qantas apologized yesterday for its involvement in a US price-fixing scam and said it had agreed to pay a US$61 million fine.

Qantas chief executive Geoff Dixon said the illegal conduct related to fuel surcharges in the international air cargo market between 2000 and last year, and did not involve the company's passenger business.

He said that the company was not the only airline being investigated, with more than 30 other carriers subject to several inquiries in other countries, including Australia.

"Qantas takes its obligations to comply with the law very seriously," he said in a statement.

"We have a comprehensive competition compliance program in place and expect all of our employees to comply with these requirements at all times," he said.

WRONG CONDUCT

"In this case, Qantas did not meet this expectation. The conduct was wrong and we apologise unreservedly for this," he said.

The US Department of Justice said in Washington on Tuesday that Qantas had admitted to engaging in a conspiracy to fix rates for cargo shipments to and from the US and elsewhere and had agreed to the fine under a plea bargain agreement.

Qantas said it had cooperated fully with the US inquiry and said similar investigations involving more than 30 other carriers were being undertaken around the world.

"Similar investigations to those being carried out by the United States Department of Justice are being undertaken by antitrust regulators in other countries, including Australia," Dixon said.

"We understand more than 30 other airlines are included in these investigations," he said.

Under the plea bargain agreement, two current employees and four past employees were excluded and could be investigated separately.

The two current employees, who were not named, denied any wrongdoing, Dixon said.

Continuing investigations could take up to two years to complete, he said.

LITTLE IMPACT

The fine should not adversely affect Qantas' operating results, Dixon said, as the company's financial statements this and last year included a US$40 million provision for the US liability.

"We do not believe this or any further financial penalties will materially affect future operating results," he said.

The felony charge covered the period between June 2000 and February last year, when Qantas was the largest carrier of cargo between the US and Australia.

During this period it earned more than US$600 million from its cargo flights to and from the US, the US justice department said.

Based on the charges, Qantas engaged in a conspiracy to eliminate competition by fixing the rates for shipments of cargo to and from the US and elsewhere.

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