British Airways and Qantas have been fined millions of pounds for their part in an international freight price fixing cartel.

The airlines reached a settlement today with the Australian Competition and Consumer Commission, (ACCC), which brought the action over the alleged price fixing of fuel surcharges in the international air cargo market between 2002 and 2006.

BA has agreed to pay a fine of $A5 million (£2 million) in the Federal Court in Sydney, subject to the agreement of a judge. Meanwhile Qantas, Australia’s national airline, agreed to pay an $A20 million (£8 million).

The cartel has been the subject of inquiries and actions by regulators in the US and Europe as well as class action suits in the US, Australia and Britain.

Graeme Samuel, the Australian regulator’s chairman, said BA and Qantas were the first airlines to be proceeded against in Australia “because both came forward and voluntarily made admissions under the ACCC’s cooperation policy”.

“Qantas has continued to assist and provide evidence both in relation to its own conduct and that of others,” Mr Samuel said.

“British Airways has also provided significant information as to its own role and that of others. It too has made available staff to assist and voluntarily respond to multiple requests for information and undertaken to continue doing so.”

In November 2007 Qantas apologised for engaging in price-fixing activity on cargo in the US and agreed to pay a $61 million (£39 million) fine. In May, a former Qantas executive accepted an eight-month jail term as part of a plea agreement with the US Department of Justice, which had also secured guilty pleas by BA, Japan Airlines and Korean Air Lines.

In August four BA executives were charged with criminal price-fixing.

In April, Japan Airlines pleaded guilty to conspiring to fix air cargo prices and paid a $110 million fine. British Airways and Korean Air Lines pleaded guilty last year and paid $300 million in fines.

In February 2006, US and European officials raided airlines as part of the probe, which centred on the imposition of fuel surcharges in the international air cargo market.

A BA spokesman said the airline had cooperated throughout the investigation. "The airline has a long-standing competition compliance policy and it is highly regrettable that this policy was not adhered to in relation to fuel surcharges on the carriage of cargo," he said.

"This agreement with the authorities in Australia brings to an end British Airways' involvement in the ACCC's investigation into a number of airlines' cargo activities. British Airways has agreed a settlement of $A5 million although this has to be ratified by the Australian Federal Court."

Geoff Dixon, Qantas's chief executive, today again apologised on behalf of the airline.

“Qantas apologises unreservedly for the conduct of the employees involved,” Mr Dixon said. “All Qantas employees are expected to comply with the law and we take any failure to comply very seriously.”

The investigations, involving more than 30 other airlines, could take another two years to complete.

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