Air New Zealand Agrees to $35M Settlement in Cargo Shipping MDL

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A settlement has been reached with Air New Zealand Ltd. to resolve claims alleging that the airline was a co-conspirator in a large price fixing scheme for air cargo shipping.

The settlement was reached with Air New Zealand in New York federal court, however the airline denied any wrongdoing. The company said it agreed to the settlement to eliminate the risks associated with continued litigation.

Air New Zealand was the second to last defendant left in the air cargo shipping MDL, leaving only Air India Ltd. left to settle or proceed in the remaining litigation.

The settlement reached by Air New Zealand brings the grand total of the settlement in the multidistrict litigation to more than $1.2 billion dollars.

“This is purely a question of mitigating an unacceptable risk created by the U.S. class action system, which creates enormous pressure to settle such matters commercially,” Air New Zealand general counsel stated. “There was no credible evidence that any Air New Zealand employee participated in any conspiracy, but the potential for an unexpected verdict was not an acceptable commercial risk for the airline.”

The air cargo shipping multidistrict litigation was initially set into motion back in 2006 following a U.S. Department of Justice and European Commission probe to investigate the possibility of anti-competitive dealings within the shipping cargo industry.

The DOJ stated that the airlines involved in the conspiracy worked in cahoots during meetings, conversations and via other means of communication to set rates that the airlines should charge across the board for various routes.

Following these meetings, the airlines and their former executives then implemented the rates agreed upon by the group of airlines, and took part in additional meetings around the globe to put the price-fixing mechanisms into action, the DOJ alleged.

In 2011, the DOJ dropped all charges from Air New Zealand and discontinued its investigation into the airline. Air New Zealand reported that the regulators from the European Commission and from South Korea had also cleared the airline from any further investigation and allegations.

The other airlines in the DOJ investigation have agreed to fines in excess of $1.8 billion.

In the civil litigation against the group of airlines, direct and indirect purchasers brought forth allegations against Air New Zealand and nearly two dozen additional airlines claiming that they were overcharged for shipping based on the alleged conspiracy.

In 2009, the U.S. District Judge overseeing the litigation at the time, Judge John Gleeson, tossed claims brought forth by indirect purchasers under state law, and the Second Circuit appeals court upheld the lower court’s decision in 2012.

In the air cargo MDL, Korean Air Lines Co. holds the distinction of having the largest settlement valued at $115 million last October. In March of this year, a $190 million settlement was reached with Nippon Cargo Airlines, EVA Airways Corp. and Asiana Airlines Inc.

Additional settlements with preliminary approval have also recently been reached with Polar Air Cargo and Air China for $100 million and $50 million respectively.

The Air Cargo Antitrust Class Action MDL is In re: Air Cargo Shipping Services Antitrust Litigation, MDL No. 1775, in the U.S. District Court for the Eastern District of New York.

UPDATE: A new settlement has been reached with 10 airlines to resolve Air Cargo Shipping Services antitrust allegations in a class action lawsuit. Click here to file a Claim Form.

UPDATE 2: On Oct. 6, 2016, a federal judge signed off on the last few settlements ending a decade-long air cargo antitrust litigation.