European Commission fines 11 airlines after cargo cartel investigation

Air Transport Intelligence News has reported that following the European Commission´s investigation into anti-competitive behavior in the air freight market, it has fined 11 airlines with fines totaling approximately EUR 800 million, the news agency said.

Air France-KLM received largest fine, exceeding EUR 310 million, comprising a penalty of EUR 182 million for the French carrier and EUR 127 million for its Dutch partner, Martinair, which received an EUR 29.5 million fine.

Lufthansa and Swiss International Air Lines did not receive penalties after securing full immunity as a result of whistleblowing efforts on the cartel.

British Airways has been fined EUR 104 million, the third-largest individual penalty, followed by Cargolux, Singapore Airlines and SAS Group who were each fined between €70-80 million.

The Commission increased the fine to SAS by 50% following its previous involvement in anti-competitive behaviour.

Cathay Pacific and Japan Airlines were respectively ordered to pay EUR 57 million and €35.7 million. Air Canada was fined EUR 21 million while lesser fines of about EUR 8 million were given to Qantas and LAN.

Five airlines attempted to secure a reduced fine, claiming an inability to pay, but have been turned down. Several airlines were, however, given leniency discounts of 10-20% for their limited involvement or assistance with the inquiry. The collective total penalty amounts to EUR 799.4 million.

Cartel members fixed prices for air freight over a six-year period between the end of 1999 and February 2006. Initial activity centred on discussions of fuel surcharges, and this later developed with the introduction of a security surcharge.

Eleven airlines, and a consultancy firm, have had charges dropped despite featuring on a formal statement of objections distributed by the Commission during its investigation.