Class actions will follow massive fine against Qantas

 Qantas has agreed to plead guilty and pay $US61 million in fines for its part in fixing fuel surcharges for transporting cargo on the trans-Pacific route.

The charges for criminal price fixing were filed by the US Department of Justice in a US court on Tuesday.

The fine represents one-tenth of Qantas’s earnings from carrying cargo across the Pacific from January 2000 to February 2006, (when the cartel operated), and $US20 million more than the company had expected it would have to pay.

But even this figure is dwarfed by the $200 million estimated damages law firm Maurice Blackburn claims the airline will have to pay victims of the cartel. Freight customers filed a class action in Australia in January, naming seven airlines, including Qantas.

The ACCC has intervened in the class action, but declined to prosecute Qantas itself so far. But the case has prompted chairman Graeme Samuel’s call for business people involved in cartels to go to jail.

He told ABC radio: “We’ve made it clear that, in our view, the penalties for dealing with any form of price-fixing behaviour of a serious nature ought to be dealt with not by means of imposing financial penalties, but rather by imposing jail sentences on those that are intimately or intricately involved in this sort of conduct.”

Samuel said that the ACCC is investigating the Qantas matter.