Airlines in Hong Kong that fixed fuel surcharges on freight in a collusive process supported and approved by the Civil Aviation Department have been the subject of investigations by cartel-busters across the globe.
The probes, which began in 2006, have resulted so far in US$3 billion in criminal and civil penalties to international airlines including Cathay Pacific Airways. Four airline executives have been jailed. Ongoing criminal investigations and civil claims for compensation in North America, Europe, Australasia and Asia could make the final bill much higher.
At issue is the way fuel surcharges were assessed and agreed by airlines around the world between 2000 and early 2006.
In Hong Kong, the department allowed airlines to submit applications collectively through the Board of Airline Representatives. The surcharges were assessed using an aviation fuel index compiled from a basket of fuel oil prices rather than the prices the airlines paid for their fuel.
Department spokeswoman Cherrie Cheung Wai, said: 'The CAD has approved a mechanism under which airlines operating into and out of Hong Kong may file to levy a cargo fuel surcharge. The mechanism works on the basis that airlines may adjust their fuel surcharges in accordance with the changes of the aviation fuel index based on average weekly spot prices of aviation fuel from published oil industry sources.'
The board began submitting filings on behalf of member airlines in early 2000 and continued until mid-2007, when the airlines applied individually to the department.
