11 November 2010 |
Eleven airlines have
been fined a combined total of more than €799 million (£685.6
million) by the European Commission (EC)
for operating a worldwide cartel for cargo services.
British Airways, AirCanada, Air France-KLM,
Cathay Pacific, Cargolux,
and Singapore Airlines were the cargo
operators fined for fixing surcharges for fuel and security without discounts
for six years.
Lufthansa and its
subsidiary Swiss International Air received immunity from the fines under the EC’s
leniency programme because it was the first to provide information about the
Cartel members fixed
prices from December 1999 to 14 February 2006. Communication on prices between
the airlines began on the basis of discussing fuel surcharges, the EC said. The
carriers contacted each other to ensure that worldwide airfreight carriers
imposed a flat rate surcharge per kilo for all shipments. Cartel members then continued
colluding to introduce a security surcharge and refused to pay a commission on
surcharges to their clients (freight forwarders). The cartel ensured all the
carriers introduced the surcharges and that increases were applied in full
without exception, the EC found.
“It is deplorable that
so many major airlines coordinated their pricing to the detriment of European
businesses and European consumers,” said vice-president for competition Joaquín
In separate statements, British Airways, Cathay Pacific,
Cargolux and LAN Chile said they are evaluating their legal options, including
whether or not to appeal the decision. British Airways added: “The fine is €104
million (£88.6 million) and falls within the provision made by the company in
its 2006-7 report and accounts.”
SAS, Air France-KLM (which owns Martinair) and
Singapore Airlines Cargo (SIA Cargo) all intend to appeal. The latter said in a
statement that it “strongly contests any suggestion that it has been involved
in a global conspiracy to fix surcharges or rates”.
It added: “Singapore Airlines Cargo further
contests any suggestion that the European Commission can apply EU law to conduct
in markets outside the EU that was lawful in those countries and did not have
direct or substantial effects in the EU.”
Qantas, Air Canada and
Japan Airlines have yet to publish statements.
Separate probes conducted by the US
Department of Justice and the Australian government have been
completed. In the US, total fines of more than $US1.5 billion (£0.93
million) were levied against airlines that acknowledged fixing fuel surcharges,
and 18 airlines have been charged. Investigations by other nations are ongoing.
The individual fines by the European Commission