Air NZ manager named in price case

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Air New Zealand's regional cargo manager for the Americas is the latest to be added to the list of airline executives facing allegations of international price fixing.

Previously scant details about the Commerce Commission's case against Air New Zealand and other airlines have come to light in a judgment from Justice Judith Potter in the High Court in Auckland.

She turned down Air New Zealand's bid to prevent Salvatore Sanfilippo being added as a defendant to face criminal charges along with five other Air New Zealand employees and the other airlines.

The commission's case, filed in 2008, is alleging price fixing by the airlines in breach of Commerce Act sections relating to anti-competitive behaviour.

A full trial is expected to begin early this year.

Until Judge Potter's judgment, the commission has been extremely secretive about the details surrounding its cartel action, refusing to say why it had raided Air New Zealand's office in 2006 or to lay out the charges in detail.

Commerce Minister Simon Power has flagged the possibility of jail sentences for convictions of price fixing, when existing financial penalties – fines of up to $500,000 for an individual and $10 million for a company – were suggested to be an insufficient deterrent.

The court decision gives a glimpse of what is to come in the trial by referring to the commission's affidavit on why Mr Sanfilippo should be joined to the action.

Judge Potter says the allegations "are in the nature of fraud" and it is alleged Mr Sanfilippo is personally a "party to a conspiracy" even though details are still "remarkably under-particularised".

The affidavit said documents taken in the raid on Air New Zealand's offices indicated contact between Mr Sanfilippo and other airlines on not only the fuel surcharges but the security surcharge, also known as war risk insurance, after the terrorist attacks of September 2001.

The commission said it had a co-operative witness who implicated Mr Sanfilippo.

Air New Zealand chief executive Rob Fyfe has repeatedly claimed since the commission's raid that Air New Zealand had found no information in the company to support the airline's involvement in the widespread cartel practice.

But the commission said in an affidavit – extracts of which were in Justice Potter's judgment – that in the raid it had found emails revealing discussions between Mr Sanfilippo and staff of other airlines in the United States about security and fuel surcharges.

In joining Mr Sanfilippo to the action, the judge has given the commission until February 9 to respond to Air New Zealand's and other defendants' request for further details of the charges.

- © Fairfax NZ News