Emirates named in New Zealand price-fixing suit

Prosecutors have filed a legal action against Emirates Airline and 12 other major carriers for anti-competitive behaviour.

New Zealand prosecutors have filed a legal action against Emirates Airline and 12 other major carriers for colluding to raise the price of air cargo. A spokeswoman for the Dubai airline said the allegations were without merit. "Emirates denies the allegations and will be defending the proceedings," she said, adding that the airline would not comment further because the matter was before the court. The New Zealand commerce commission, a competition watchdog agency, said the airlines - including its national carrier, Air New Zealand - acted like a cartel and raised the price of air freight through fuel surcharges over a period of nine years. The other airlines named in the action include British Airways, Qantas, Singapore Airlines, Cathay Pacific, Japan Airlines, Korean Airlines, Thai Airlines, United Airlines, Malaysian Airline Systems, Cargolux International and Garuda International. The news caps a volatile year for the cargo industry, which has been beset by record fuel prices and then falling demand due to the global economic slowdown. Worldwide, air freight fell 7.9 per cent in October compared with the same period last year, according to the International Air Transport Association. Cargo volumes crept up by just 1 per cent among Middle East airlines - the only region to report growth. Paula Rebstock, the chief of the commerce commission, described the charges as "very serious". "It has affected a level of trade that we have never seen in New Zealand of nearly US$3 billion (Dh11.01bn), which has done very significant harm to the New Zealand economy," she said. According to reports, the agency has prosecuted three carriers for not assisting it with the investigation, and a court decision is expected next month. The price fixing allegations were met with an angry defence by Air New Zealand, which said it had not seen any evidence to date and made hundreds of thousands of documents available. In a statement, John Blair, the lawyer for the airline, said: "This is clearly an approach designed to justify their existence and seems more about grandstanding than about getting to the bottom of the allegations." Emirates flies 28 weekly flights from Dubai to two New Zealand destinations - Auckland and Christchurch - via stopovers in Melbourne and Sydney. It has been keen to expand its operations in Australasia, and last month its senior vice president for the region said it would seek approval to fly to the US from Australia. Last year, British Airways and Virgin Atlantic admitted to colluding to set the price of passenger tickets on trans-Atlantic flights between 2002 and 2006. The two British airlines will pay up to £100 million (Dh561.6m) in compensation to about 11 million passengers that were affected by the price fixing, in addition to fines levied by British and US authorities. In addition, last week an Australian court levied a fine of 20m Australian dollars (Dh49m) on Qantas for price fixing on air cargo over a four-year period. [e-mail]