Air New Zealand has agreed to settle a class action compensation claim in the United States for $35 million, rather than continue defending its position and face potentially up to $8 billion bill for cargo conspiracy claims.
In 2006, a civil compensation claim was filed naming a significant number of global airlines, including Air New Zealand, for alleged conspiracy involving air cargo fuel and security surcharges between 2000 and 2006. In 2011, Air New Zealand having successfully defended its position with the US Department of Justice, was released from their criminal investigation but after ten years of arguing the validity of the civil compensation lawsuit in US courts, Air New Zealand elected to pursue settlement with the plaintiffs.
“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,” said John Blair, Air New Zealand’s General Counsel.
Under US law, every participant in a conspiracy is liable for the harm caused by the entire conspiracy regardless of the extent of their participation. When a conspiracy involves “anti-trust” conduct, the entire damages are trebled. The settlement amount of $35 million represents 2.8% of the US$1.223 billion paid in settlements by 28 airlines. Air New Zealand is one of the last airlines to settle.