Air New Zealand Settles Lawsuit Case in US, Paying Worth $35 Million
May 09, 2016 08:15 AM EDT
The flag carrier of New Zealand, Air New Zealand has reached a settlement to a class-action lawsuit case filed in the United States. The lawsuit alleges that the national airline is involved in conspiracy, cartel fixing freight air cargo fuel and security surcharges.
According to Sky News, the country's national airline accepted the settlement terms to pay US $35 million or $A47.47 million. Air New Zealand and Air India are the only remaining airlines that yet to settle the case while other twenty-six airlines already paid for the settlement deals worth $US1.19 billion.
The trial for the case has been rescheduled in September as the initial date was cancelled on January after most of the airlines settled. Air NZ said the settlement was agreed through mediation on May 7th and is pending for court approval in New York.
The airline also stated that they took the choice to settle "to avoid the risk of a potentially very material commercial liability by continuing to defend its position," New Zealand Herald quoted. According to John Blair, Air New Zealand's general counsel, there's no "credible evidence" that the airline took part of the said conspiracy. "But the potential for an unexpected verdict was not an acceptable commercial risk for the airline," Blair stated.
The complaint was filed back in the year 2006 by the plaintiffs, freight forwarders who named some of the airlines around the globe. The freight forwarding companies claimed airlines colluded over cargo fuel and security surcharges between 2000 and 2006. Air New Zealand said the settlement cost wasn't reflected in the company's guidance for 2016 earnings to exceed $NZ800m, NBR reported.
The plaintiffs estimate damages at about $US2.66 bln which would triple to as much as $US7.98 bln under US antitrust laws. Air New Zealand is one of the last airlines to settle and one of the few airlines involved in the action to have been investigated by US Department of Justice and not subsequently prosecuted.