New Zealand Commerce Commission chairwoman Paula Rebstock said the airlines - including British Airways, United Airlines, Japan Airlines, Qantas and Air New Zealand - caused extensive harm to New Zealand's economy by secretly agreeing to raise prices. Air New Zealand strongly denied the allegations.

'It will have resulted in increased costs for exporters and importers and higher overall prices for many consumer goods,' Ms Rebstock said in a statement.

The commission said the airlines colluded to raise air freight prices by imposing fuel surcharges for more than seven years, affecting the price of cargo both into and out of New Zealand.

The commission said it would also take action against seven airline staff, 'including senior executives'. Its statement said that, 'some airlines are co-operating with the commission and an early resolution may be possible in some cases'.

Airlines are estimated to earn more than NZ$400 million (S$321.8 million) each year through air cargo operations in and out of New Zealand. While the surcharge agreement was in place between 2000 and 2006, total revenue for the airlines was around NZ$2.9 billion, the commission said.

Similar action has been taken by competition watchdogs in other countries.

US courts so far have awarded penalties of US$1.2 billion (S$1.77 billion) against nine airlines for participating in a cartel.

In Australia, the Federal Court this month ordered Qantas to pay A$20 million (S$19.2 million) and British Airways to pay NZ$5 million in penalties for price-fixing.

Air New Zealand said on Monday the commission had refused to present it with any evidence of price-fixing.

The commission's approach seemed to be 'more about grandstanding than about getting to the bottom of the allegations', it said.

'Despite extensive reviews of our own files and interviews with key staff, Air New Zealand has not been able to identify any evidence of price-fixing or cartel behaviour,' Air New Zealand general counsel John Blair said in a statement.

The other airlines cited by the commission were Cargolux International, Cathay Pacific, Emirates, Garuda Indonesia, Korean Air, Malaysia Airlines, Singapore Airlines and Thai Airways. -- AFP