Qantas - fly the criminal skies

Aaah Qantas - the "spirit of Australia". So long as you mean old fashioned pre-colonial convict spirit of Australia to steal as much as you can from anyone you can. I have been tough on Qantas in the past. Have complained about the rort that is the Pacific Route, the bad customer service and the faulty (now fixed) Video On Demand system. However I have also defended them as one of the best airlines in the world.

But now we have Qantas effectively pleading guilty to a charge of price fixing and agreeing to pay a fine of US$61mm as a result of a US Department of Justice investigation (e-travelblackboard report here). They have settled an action that claimed they colluded with a number of airlines (maybe as many as thirty) to set prices (ie reduce competition) in cargo pricing.

Let's be clear as to what it means to admit to price fixing. This is akin to an admission of criminal behaviour by Qantas. It is a confirmation that Qantas as a company engaged in a criminal act to defraud its customers (cargo in this instance) of money by secretly agreeing with competitors to fix prices. To engage in secretive activity that resulted in customers paying more than they should have. Anti-competitive activity is the same as corporate theft. A class action is already under way in civil court on behalf of the customers that were ripped off by this behaviour.

Qantas CEO Geoff Dixon seemed to indicate it was a few employees not a company in this comment attributed to him

“Qantas takes its obligations to comply with the law very seriously. We have a comprehensive competition compliance program in place, and expect all of our employees to comply with these requirements at all times,”

...and in indicating that two current and four past employees are not part of this plea agreement. In other words that those employees may be subject to separate prosecution.

Whether or not it was rogue employees rather than company policy - this is still a huge slur on Qantas - and whether Qantas likes it or not it places a cloud of suspicion over all of Qantas' activities.

UPDATE - Jan 08 - Qantas has been taking a dive in the stock market and this price fixing issue is part of the reason (according to the Sydney Morning Herald). SMH has also published the names of the executives that were excluded from the deal (four ex and two current employees). They are Qantas's former head of freight Peter Frampton, the airline's head of freight in the US Bruce McCaffrey, Qantas's general manager of freight sales John Cooper, Qantas's country manager for Thailand and former head of freight in Singapore Harold Pang, Qantas's head of commercial freight Stephen Cleary, and another Qantas freight employee Desmond Church.

Qantas has been given two weeks to pay up.