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Airlines accused of cargo price-fixing in Aussie lawsuit
2007-02-01
Seven international airlines have been accused of operating a freight price-fixing cartel in a 200 million dollar (155 million US) class-action lawsuit in Australia, lawyers have said. Australian flag carrier Qantas Airways, British Airways plc, Germany's Lufthansa, Singapore Airlines, Hong Kong's Cathay Pacific, Air New Zealand and Japan Air Lines (JAL) were named in the suit filed in Melbourne on January 11. The suit was filed in a Federal Court on behalf of Australian freight users affected by the alleged cargo cartel, which has also been the focus of other lawsuits in the United States and Canada. Papers were served on Qantas and the other airlines on Thursday, lawyers said. The suit alleges the carriers fleeced freight users by fixing cargo prices through the imposition of fuel, security and war-risk surcharges on customers since 2000 in what their lawyers say was a flagrant case of anti-competitive abuse. "Air freight surcharges have been unlawfully inflated over the last seven years," said lawyer Kim Parker of the firm Maurice Blackburn Cashman, which is representing the alleged victims. "This case will bring those contraventions into the spotlight and will enable the victims of this cartel to claim back significant losses over the period," she said. The alleged victims, who shipped goods on the carriers named in the suit, claim that the airlines made a secret agreement to use the surcharges to lift industry prices. They included fuel surcharges attributed to higher fuel costs, security charges because of extra measures after the September 11 attacks on US targets and war-risk surcharges blamed on higher insurance costs linked to the Iraq war. Businesses and people who have paid for more than 20,000 dollars worth of air freight services over the last seven years were affected by the alleged cartel, Parker said. The airlines however claim they were forced to levy the surcharges because of rising oil prices, boosted security costs following the September 11 attacks and increased insurance tariffs. Lawyers for the Australian victims said they had served papers on Qantas and the other airlines. A Qantas spokesman said the company would review the claim and respond once it had examined the papers while the other carriers were unavailable for comment. US, European Union and Asian officials announced 11 months ago that they were investigating possible price fixing by the air cargo industry and raided several airline offices around the world. Prosecutions and class actions have already been launched in the United States and Canada over the same alleged cartel. In the US case an 85-million-dollar settlement was reached with Lufthansa, while the remaining claim against the other airlines stands at around one billion dollars. Australia's international freight market is about one fifth of the size of its US equivalent and losses were therefore estimated at 200,000 dollars, Parker said. The lead plaintiff in the lawsuit, which could eventually include thousands of plaintiffs, is Auskay International an importer and exporter of vacuum systems and spare parts based in Melbourne. The company declined to comment. If the action -- which could take three years to go to trial -- proves successful, it could pave the way for a lawsuit on behalf of passengers who have also subject to fuel surcharges, Parker said. "It's quite possible we will do that but we're presently focused on the issues in this class action," she told reporters.
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