Major airlines slapped with 776 m euro EU fine for air cargo cartel

Monday, 17 April 2017 00:00 - - {{hitsCtrl.values.hits}}

BRUSSELS (Reuters): Air France-KLM, British Airways and nine other airlines were hit with a 776 million euro ($835.5 million) fine by EU antitrust regulators recently for taking part in an air cargo cartel more than a decade ago.

The European Commission re-imposed the penalties after Europe’s second highest court in 2015 annulled the EU executive’s 2010 decision due to a procedural error.

The fines were unchanged for all the airlines except for the amount due from Martinair – cut to 15.4 million euros ($16.53 million) from the 29.5 million euro ($31.67 million) amount set in 2010.

Air France was fined 182.9 million euros ($196.32 million), the highest, followed by KLM at 127.1 million ($136.43 million), British Airways at 104.4 million ($112.06 million), Cargolux at 79.9 million ($85.76 million) and Singapore Airlines at 74.8 million ($80.29 million).

Other carriers penalised were Air Canada, Cathay Pacific Airways, Japan Airlines, LAN Chile and SAS. Lufthansa, along with subsidiary Swiss International Airlines, escaped a fine as it alerted the cartel to the EU competition authority.

The Commission said it had fixed the procedural error cited by the court. “Working together in a cartel rather than competing to offer better services to customers does not fly with the Commission,” European Competition Commissioner Margrethe Vestager said in a statement.

SAS, with a 70 million ($75.14 million) fine, and Air Canada, with a 21 million ($22.54 million) fine, have said they would appeal the new decision. “Air Canada will contest it vigorously,” a spokeswoman for the airline said by email.

The Commission in its 2010 finding said the cartel fixed air freight services, fuel and security surcharges between December 1999 and February 2006.

The decision led to a series of damages claims against the airlines from companies such as Germany’s Deutsche Bahn, carmaker BMW and car supplier Bosch. ($1 = 0.9288 euros) ($1 = 0.9316 euros)