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Qantas admits price-fixing 'likely'

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kamchatsky

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Qantas admits price-fixing 'likely' | NEWS.com.au Business

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Qantas admits price-fixing 'likely'

By Mark Schliebs
August 03, 2007 06:59am

Article from:


QANTAS may be facing massive penalties after admitting it was "likely" it had engaged in price-fixing of the type that saw British Airways fined a total of $643.96m for anti-competitive behaviour on Wednesday night.

During the trans-Atlantic investigation into the collusion between BA, Korean Air Lines, Virgin Atlantic and Lufthansa to set prices, Qantas management handed over documents to the US Department of Justice (DoJ), which showed possible breaches of competition law.

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In a later company document from the failed takeover bid by Air Partners Australia dated February 2007 and seen by NEWS.com.au, Qantas admitted the DoJ investigation had found likely breaches in non-passenger services.

"During this investigation Qantas learned that the practice adopted by Qantas Freight and the cargo industry generally, to fix and impose cargo fuel surcharges is likely to have breached relevant competition laws," the document said.

"Qantas has been co-operating fully with all regulators and will continue to provide information to assist with their investigations."
Previous to this Qantas had only admitted that there "may" have been breaches.

Qantas management has categorically denied involvement in price-fixing on passenger services.

In February of this year court cases were launched in the US and Australia alleging anti-competitive Qantas behaviour in the freight and cargo sector.

The sums being extracted from British Airlines in the US and Britain would give the national carrier reason to worry.

Qantas has refused to be drawn on the matter of damages except that it "expects that it will take at least 12 months before it is possible to quantify any direct or indirect liability associated with these matters".
 

JohnK

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I know this is more to do with freight rather than passenger movement but still there is a very easy solution.

Ban fuel surcharges worldwide. Force the airlines to include the cost of fuel in the price of an airfare and then they can do what they like with their airfares.
 

NM

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JohnK said:
I know this is more to do with freight rather than passenger movement but still there is a very easy solution.

Ban fuel surcharges worldwide. Force the airlines to include the cost of fuel in the price of an airfare and then they can do what they like with their airfares.
You have my support that recommendation. But unfortunately there is no entity that can enforce such a world-wide ban :evil: .
 

browski

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Hmmmm, I'm not so sure about that NM. Worldwide maybe not but domestically here in Australia I think airlines must advertise their total cost of the flight - not the pre "tax" nor the pre fuel surcharge cost of the flight
When airlines advertise the price not inclusive of a fuel surcharge, they are in breach of advertising guidelines but we currently have a lack of will to enforce the law.

We must remember that Fuel Surcharges are not a gov't tax and their existance is merely a ploy by the airlines to reduce their losses off Award flights. (Can anyone give another reason?)
The lack of enforcement exists because GST is calculated on the entire operating cost which includes the Fuel Surcharge so the gov't at least receives their full revenue.
 

stryker

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browski said:
We must remember that Fuel Surcharges are not a gov't tax and their existance is merely a ploy by the airlines to reduce their losses off Award flights. (Can anyone give another reason?)
UA for one does not engage in this disreputable practice (ask me how I know).
 
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