EUROPE & CIS: EU cartel fines now total €800 M

Europe’s competition watchdog hit 11 airlines with nearly €800 million (US$1.1 billion) in fines in November for running a global cargo cartel that included Air France-KLM, British Airways and Japan Airlines. “It is deplorable that so many major airlines coordinated their pricing to the detriment of European businesses and European consumers,” said European competition commissioner […]


Europe’s competition watchdog hit 11 airlines with nearly €800 million (US$1.1 billion) in fines in November for running a global cargo cartel that included Air France-KLM, British Airways and Japan Airlines. “It is deplorable that so many major airlines coordinated their pricing to the detriment of European businesses and European consumers,” said European competition commissioner Joaquin Almunia. The fines, totalling €799.4 million, were slapped on airlines that span the globe, from Air Canada and LAN Chile in the Americas to Cathay Pacific Airways and Singapore Airlines in Asia and Qantas in Australia. The 11 cargo carriers coordinated their action on surcharges for fuel and security without discounts over a sixyear period, between December 1999 and February 2006, the European Commission said. The cartel covered flights from, to and within the European Economic Area. The Air France-KLM group was hit with the biggest fine, 310 million euros, of which €183 million was for Air France and €127 million for KLM. Martinair, which is owned by Air France, was fined €29.5 million. Elsewhere in Europe, British Airways was ordered to pay €104 million, Scandinavia’s SAS group was fined €70.2 million and Luxembourg’s Cargolux will have to pay €79.9 million. In Asia, Singapore Airlines was fined €74.8 million, Cathay was hit with €57.1 million and Japan Airlines will pay €35.7 million. Air Canada must pay €21 million while Qantas and LAN Chile received the smallest fines, €8.9 million and €8.2 million, respectively. Five airlines applied for a reduction in the fine, claiming they were unable to pay it, but the commission said none of them met the conditions. Lufthansa and its subsidiary Swiss International Air Lines escaped a fine under the commission’s leniency programme for being the first to provide information about the cartel. The commission said it dropped charges against another 11 carriers and one consultancy firm which it did not name.