Qantas comes within Range of US Cargo Price-fixing Probe

Qantas is coming under the guns of US Justice Department investigators as allegations spread that the Australian carrier is involved in an air cargo price-fixing cartel that has resulted so far in Korean Airlines and British Airways being heavily fined.

British Airways and Korean Air were each fined US$300 million by the US anti-trust regulator after admitting to having conspired to fix prices of passenger and cargo flights. On top of this penalty, British Airways has to pay a separate fine of GBP121.5 million (US$248.04 million) after admitting to colluding over fuel surcharges on tickets to the British anti-trust agency.

Virgin Atlantic and Lufthansa escaped fines by bringing the wrongdoings that stretch over a period of several years to light.

A report by the Australian Associated Press said the nation's largest airline is "watching developments" of a US Department of Justice (DOJ) investigation into price-fixing in the air cargo market. The carrier is said to have earlier conceded it probably breached competition laws.

"During this investigation Qantas learned that the practice adopted by Qantas Freight, and the cargo industry generally, to fix and impose cargo fuel surcharges is likely to have breached relevant competition laws," Qantas said in a statement issued in February.

Qantas chief executive Geoff Dixon also earlier admitted the carrier faced potential liabilities over the incident.

"We have said there is a potential liability, but we are not able to quantify the matter as yet," Mr Dixon said.

Proceedings have been filed in the Federal Court of Australia against Qantas in relation to alleged price-fixing of air cargo fuel surcharges. Qantas has also been named as a defendant in a class action suit in the US District Court of New York, the report said.

Qantas was said to have first received a subpoena from the DOJ in May 2006 to produce documents relating to prices set in the air cargo market.