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Poor Old Qantas: Now Fined By EU

  • November 10th, 2010
  • Posted by EUEditor

qantas-cargo.jpegThe fining of Qantas over anti-trust behaviour in its cargo operations, along with 11 other airlines, by the European Commission , has capped a rough month for the Australian airline.

ENGINE TROUBLES

It was less than a week ago, 4.11.10, that a Qantas Airbus A380 made an emergency landing in Singapore after one of its engines spectacularly burnt out in flight, the 459 people on board exiting unhurt.

See EUAustralia Online,”Qantas 380 Scare: Aviation Alert”, 5.11.10.

qantas-747.jpegTwo days later, again just minutes out of Singapore, a Boeing 747-400 turned back, when an engine caught fire.

It was a different kind of engine and did not cause the same disintegration of the protecting cowling as happened in the first incident.

LAW TROUBLES

The third case now has seen the European Commission, 9.11.10, fine the Australian airline €8.8-million (A$12.07-million; xe.com, 10.11.10), in a swoop on companies accused of colluding on fuel surcharges and security costs, flowing on from the 11 September attack on New York.

The EC Competition Commissioner, Joaquín Almunia, said the fact of a fuel crisis, and of higher security costs after “nine-eleven” did not excuse a breach of the law set up to provide fair competition in business.

“It is deplorable that so many major airlines coordinated their pricing to the detriment of European businesses and European consumers”, he said.

“With today’s decision the Commission is sending a clear message that it will not tolerate cartel behaviour,”

Qantas has had a similar conviction over its cargo operation, in the United States in 2007, linked to the same cartel, but this time it was a relatively minor player.

TROUBLED AIRLINES

Air France was fined €182.9-million (A$250.97), and its associate airline KLM €127.16-million (A$174.52); British Airways €104.04-million (A$142.79-million), Cargolux €79.9-million (A$109.66-million), Singapore €74.8-million A$102.65-million), SAS €70.167-million (A$96.29-million), Cathay Pacific €57.12-million (A$78.38), Japan Airlines €35.7-million (A$48.98-million), Martinair  €29.5-million (A$40.47-million), Air Canada €21.037-million (A$28.86-million), and Lan Chile €8.22-million (A$11.28-million).

Lufthansa was spared any fine because it confessed to involvement, and started an investigation  into the collusive arrangements, which went on for six years after 1999.

Competition law is one of the central tasks of the European Commission with frequent announcements of decisions on competition matters through its media service.

Mr Almunia, this time, pointed out that while the field was regulated the European Commission supported consolidation in industry, and in the case of airlines, had authorised numerous alliances.

DAMAGE CONTROL

Qantas after grounding its six A380 aircraft has removed the engines from some of them for extensive testing, and working to reassure passengers.

In a note through regional managers it said (10.11.10):  “While the suspension of A380 flying is regrettable, customers should be aware that our A380s undertake 50 departures per week out of a total of 613 departures. Our current international fleet consists of 26 Boeing 747s, 14 Airbus A330s and 6 Airbus A380 aircraft. Qantas domestic flights are operating as scheduled as are most of our international flights.”

The airline says it has referred the European Commission decision on the cartel operation to its legal advisers.

Singapore Airlines is similarly a little embattled this week; not only being implicated in the anti-trust action, it has also now announced, 10.11.10,  precautionary moves with its A380 planes.

Three of those were grounded for testing in London, Melbourne and Sydney, later to be flown empty back to Singapore to have suspect engines replaced.


Reference

European Commission, “Antitrust: Commission fines 11 air cargo carriers €799 million in price fixing cartel”,  IP/10/1487, 9.11.10.
http://europa.eu/rapid/pressReleasesAction.do?reference=IP/10/1487&format=HTML&aged=0&language=EN&guiLanguage=en, (10.11.10).  See also, http://ec.europa.eu/comm/competition/antitrust/actionsdamages/documents.html, (10.11.10).

Radio Australia, Melbourne,   “ Qantas fined for cargo price fixing”, 10.11.10. http://www.radioaustralia.net.au/connectasia/stories/201011/s3062451.htm, (10.11.10).

Pictures  Aircargo.net.au  airlines.nl

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