The US Dept of Justice Antitrust division chalks up another $124 million in fines imposed on air cargo price fixers. Sharon Gill reports ...
According to the US Dept of Justice, LAN Cargo, Aerolinhas Brasileiras and EL AL have agreed to plead guilty to price-fixing and pay fines totalling more than $124 million.
Chile-based LAN Cargo and its partly-owned Brazilian subsidiary Aerolinhas Brasileiras have agreed to pay a single criminal fine of $109 million, and EL AL has agreed to a fine of $15.7 million.
According to the charges filed in the US District Court for the District of Columbia, each airline engaged in a conspiracy in the US and elsewhere to eliminate competition by fixing the cargo rates charged to customers for international air shipments, including to and from the US.
All three airlines were charged with engaging in the conspiracy from January/February 2003 until at least February 2006.
The plea agreements are subject to court approval. Each airline has agreed to co-operate with the Department's ongoing investigation.
The ongoing investigation is being conducted by the Antitrust Division's National Criminal Enforcement Section and the FBI.
US Antitrust investigation
To date, a total of twelve airlines and three executives have pleaded guilty or agreed to plead guilty in the Justice Dept's ongoing investigation into price fixing in the air transportation industry, more than $1 billion in criminal fines have been imposed and executives have been fined and sentenced to jail time.
- Air France-KLM agreed to pay $350 million
- Martinair agreed to pay $42 million
- Cathay Pacific agreed to pay $60 million
- SAS agreed to pay $52 million
- Japan Airlines sentenced to pay $110 million
- Qantas Airways sentenced to pay $61 million
- Korean Air Lines sentenced to pay$300 million
- British Airways sentenced to pay $300 million
- Bruce McCaffrey, Qantas - sentenced to eight months in jail
- Timothy Pfeil, SAS - sentenced to six months in jail
- Keith Packer, British Airways - sentenced to eight months in jail
Also in July 2008, seven freight forwarding companies agreed to pay US$666,237 to resolve allegations of bid rigging in the US, and to co-operate with the US govt in its pursuit of claims against one Belgian and four German transportation/logistics companies.
Furthermore, four shipping executives agreed to plead guilty to conspiring to eliminate competition and raise prices for the transportation of goods in the US-Puerto Rico shipping lane during the period May 2002 - April 2008.
Peter Baci of Jacksonville, Kevin Gill and Gregory Glova of Charlotte, North Carolina, and Gabriel Serra of San Juan, Puerto Rico agreed to serve jail terms and pay criminal fines of $20,000 each.
A one-count felony obstruction of justice charge also was filed against a fifth shipping executive, Alexander Chisholm of Jacksonville, who pleaded guilty to charges of destroying computer documents that were relevant to the coastal shipping investigation and responsive to a grand jury subpoena. Chisholm agreed to plead guilty and serve jail time.
All five executives work for large US companies that provide freight shipping services to customers transporting goods between the continental US and Puerto Rico.
Europe
In December 2007, the European Commission accused 25 airlines, including Air Canada, Air France-KLM, Air New Zealand, All Nippon Airways, British Airways, Cargolux, Cathay Pacific, LAN Cargo (Chile), Japan Airlines, Lufthansa, Malaysian Airline System, SAS and United Airlines (US) of violating EU rules on restrictive business practices.
And in August 2007, the UK Office of Fair Trading nailed British Airways with a ₤121.5 million penalty for its price fixing activities.
Australia & New Zealand
The Federal Court in Sydney, Australia ordered Qantas to pay Aus$20 million and British Airways to pay Aus$5 million in pecuniary penalties for breaching the price fixing provisions of the Trade Practices Act 1974.
New Zealand's Commerce Commission initiated proceedings in the High Court in Auckland against thirteen airlines and seven airline staff, including senior executives, for extensive cartel activity in the air cargo market during a period of more than seven years.
Proceedings were filed against Air New Zealand, British Airways, Cargolux, Cathay Pacific, Emirates, PT Garuda Indonesia, Japan Airlines, Korean Airlines, Malaysian Airline, Qantas, Singapore Airlines & Singapore Airlines Cargo, Thai Airways and United Airlines.
