Qantas to face $200 million cartel class action

1 February 2007
A $200 million cartel class action will be served today on Qantas and a number of other large international airlines including Lufthansa, Singapore Airlines, Cathay Pacific, Air New Zealand, JAL and British Airways.

The case arises from a global price-fixing cartel in the international air freight industry which started in 2000 and continues to the present time.  It involves various surcharges imposed by the airlines over this period including:

1. Fuel surcharges attributed to higher fuel costs;

2. Security surcharges attributed to additional security measures following the September 11 attacks; and

3. War-risk surcharges attributed to increased insurance costs associated with the war in Iraq.

Maurice Blackburn Principal Kim Parker said price fixing and market rigging by powerful organisations are the worst kinds of anti-competitive abuse and it was important that victims of that behaviour had an opportunity to recover their losses.

"Air freight surcharges have been unlawfully inflated over the last seven years.  This case will bring those contraventions into the spotlight and will enable the victims of this cartel to claim back significant losses over this period.

"If the case is successful, all Australian businesses will benefit from future reductions in the cost of air freight," Ms Parker said.

It is claimed that those surcharges were used as a mechanism to increase prices by secret arrangement between the various airlines and that they were not connected with increased cost of operations as represented by the airlines.

Businesses and individuals affected by this cartel include those who have purchased more than $20,000 of air freight services over the last seven years.

This case follows prosecutions and class actions issued in the US and Canada in relation to the same cartel.  In the US class action, a settlement has been reached with one of the airlines, Lufthansa, for $85 million, being compensation for direct purchasers of air freight services.  The remaining claim against the other airlines in the US is estimated to worth $1 billion.

Maurice Blackburn was the first legal firm in Australia to successfully conclude a cartel class action when it won $30.5 million in July last year for victims in the "vitamins cartel class action".  The case signalled a new era in bringing illegal corporate anti-competitive behaviour to account and in protecting the interests of those who are deliberately ripped off.