Air New Zealand agrees US$35 million price fixing settlement

In 2006 the US department of Justice (DOJ) raided several cargo carriers across the world in an investigation into alleged fuel surcharge price fixing. Subsequent to this, over 90 civil lawsuits were brought against over two dozen airlines, including Air New Zealand. The alleged conspiracy took place between 1999 and 2006.
Between 2006 and now many airlines cited have pled guilty and paid fines approaching US$3 billion to global competition agencies in the US and south Korea, while in Europe alone a number of airlines paid over US$1 billion in fines. In 2014 Schenker AG, a unit of the rail company Deutsche Bahn AG, brought a US$370 million suit against, among others, Qantas Airways Ltd., All Nippon Airways Ltd. and Cargolux Airlines International SA.
Air New Zealand, while investigated by the DOJ, was never charged and in 2011 was released from the criminal investigation. However, it has subsequently reached a settlement to pay US$35 million, noting that it is “one of the few airlines involved in the action to have been investigated by the [DOJ] and not subsequently prosecuted.”
According to Air New Zealand general counsel, John Blair, the settlement was “purely a question of mitigating an unacceptable risk created by the US class-action system, which creates enormous pressure to settle such matters commercially,” adding that “There was no credible evidence that any Air New Zealand employee participated in any conspiracy, but the potential for an unexpected verdict was not an acceptable commercial risk for the airline.”
The settlement, which was reached on May 7, and which is still subject to court approval, represents 2.8% of the US$1.2 billion already paid in settlement by 28 other airlines, while Air India still has litigation pending against it.
For the financial year ending June 30, Air New Zealand’s projected earnings should be more than US$800 million excluding taxes and its shareholding in Virgin Australia.