Qantas Enters Deed of Settlement with ACCC

Sydney, 28 October 2008

Qantas said today it had entered a Deed of Settlement with the Australian Competition and Consumer Commission (ACCC) to settle its liability in Australia resulting from price fixing conduct within its Freight Division and had agreed to pay a fine of A$20 million.

The settlement with the ACCC follows Qantas' settlement in the United States of America in late 2007.

The Chief Executive Officer of Qantas, Mr Geoff Dixon, said the agreement, once accepted by the Federal Court, settled the liability in Australia for Qantas and all of its current employees.

"Qantas is one of the first airlines to settle its liability in Australia. Qantas apologises unreservedly for the conduct of the employees involved. All Qantas employees are expected to comply with the law and we take any failure to comply very seriously," Mr Dixon said.

"Since being advised of the allegations in May 2006, Qantas has cooperated fully with investigations by the ACCC and all other relevant antitrust regulators.

"Similar investigations, involving more than 30 other airlines, continue in Europe and other jurisdictions and could take another two years to complete.

"Qantas will continue to cooperate with the ACCC and other antitrust regulators on these investigations."

Mr Dixon said that the illegal conduct involved the imposition of fuel surcharges in the international air cargo market between 2000 and 2006, pursuant to a methodology initially created and published by the International Air Transport Association (IATA) and subsequently published by Lufthansa Cargo and other carriers.

"Antitrust immunity was sought by IATA for industry wide imposition of the same surcharge. The immunity was subsequently refused. However, the industry continued to impose the surcharge," Mr Dixon said.

Mr Dixon noted that the conduct within Qantas did not involve the company's passenger business.

Issued by Qantas Corporate Communication (3842)