The High Court has ordered three further airlines to pay a combined total of $9.6 million in penalties for their role in the air cargo cartel case brought by the Commerce Commission. This brings the total penalties in the case to over $35 million.

Today's penalty judgments against Cathay Pacific Airways Ltd ($4.3 million), Thai Airways International PLC ($2.7 million), and MASkargo System Berhad Ltd ($2.6 million) were for price fixing in breach of the Commerce Act. The breaches took place at various times between February 2000 and February 2006.

All three airlines were also ordered to pay court costs to the Commission. The penalties were recommended to the Court by the Commerce Commission and each airline as part of pre-trial settlements.

Cathay admitted liability for agreeing fuel and security surcharges for cargo flown from India to New Zealand, and did not dispute agreeing fuel and security surcharges for the Singapore to New Zealand cargo route to New Zealand. Thai admitted liability for agreeing fuel and security surcharges in Indonesia and Malaysia for cargo flown to New Zealand. MASkargo admitted liability for agreeing fuel and security surcharges in Indonesia and Switzerland for cargo flown to New Zealand.

The Commission has previously received penalties against seven other airlines: British Airways PLC, Cargolux Airlines International S.A, Emirates, Japan Airlines International Co. Limited, Korean Air Lines Co. Limited, Qantas Airways Limited, and Singapore Airlines Cargo.

"The Commission is pleased to have settled with a further three airlines in this significant case. The penalties are a reminder to both New Zealand and overseas-based companies that colluding on prices is illegal and may result in substantial penalties under the Commerce Act. The Commission is committed to pursuing cartels that affect New Zealand markets,” said Commerce Commission Chair Dr Mark Berry.

Cathay and Thai were among the 13 airlines the Commission filed proceedings against in December 2008, alleging that the airlines colluded to impose fuel and security surcharges for air cargo shipments to and from New Zealand. The Commission also then filed proceedings against Malaysian Airline System Berhad (Malaysian Airlines, the parent company of MASkargo System Berhad). As part of the settlement it was agreed that MASkargo would be added as a defendant to the proceeding and the proceeding would be discontinued against Malaysian Airlines.


Section 30 of the Commerce Act makes price-fixing agreements between competitors unlawful. This includes agreements with the purpose, effect or likely effect of fixing, controlling or maintaining prices, or that provide a mechanism for doing so. An agreement can be a formal document, such as a contract. An agreement can also be very informal.

A company that contravenes section 30 may be ordered to pay penalties under section 80 of the Commerce Act. The penalty must not exceed the greater of:

  • $10 million
  • or, if it can be readily ascertained and if the Court is satisfied that the contravention occurred in the course of producing commercial gain, three times the value of any commercial gain resulting from the contravention
  • or, if the commercial gain cannot be readily ascertained, 10% of the turnover of the body corporate and all of its interconnected bodies corporate (if any).