According to the European Commission, 11 airlines have been fined a total of $1.1 billion due to a coordinated effort to fix air cargo prices.
The European Union regulator has imposed the record fine due to airlines including British Airways, SAS, Cargolux, Singapore Airlines, Cathay Pacific, Qantas, Japan Airlines, Air Canada, and LAN Chile allegedly fixing some cargo routes. Europe’s largest airline, Air France-KLM will be penalized the largest amount of $372 million.
European Affairs Minister Pierre Lellouche said he was “shocked by the totally disproportionate nature of this fine in terms of the losses potentially suffered by users of (the) freight service of the group’s companies.”
The fine “will inflict considerable damage on the French air sector and adds to losses suffered by the sector in 2009, in the context of the financial crisis,” he said in a statement.
The EU’s competition watchdog had issued complaints to 26 airlines, due to an international initiative that targeted executives, resulting in jail time, fines, and settlements. The U.S. authorities have made criminal charges against 14 executives for price-fixing and 18 airlines have already been fined around $16 billion.
“It is deplorable that so many major airlines coordinated their pricing,” EU Competition Commissioner Joaquin Almunia said in a statement. Extra security costs in the aftermath of the attacks on Sept. 11, 2001, also weren’t “an acceptable reason to stop competing,” Almunia told reporters in Brussels yesterday.
There has already been a class action lawsuit related to the price fixing activities in Australia, said a local law firm.
“The airlines have been trying to deny that there is a case to answer in this country,” Brooke Dellavedova of class-action law firm Maurice Blackburn said.
“Given Australia’s geographic isolation and our reliance on international air freight, there is no doubt that Australian businesses were affected.”
Maurice Blackburn is representing several businesses that are alleging that their air cargo shipments have been overcharged, seven airlines are involved including British Airways and Qantas.
Australia’s flagship airline Qantas “acknowledged the improper conduct” by its freight department, however it will formally respond when the full decision has been confirmed next week, according to an e-mailed statement. In 2008, the Sydney-based company had already received a $20.1 million penalty for involvement in the cartel, by the Australian Competition and Consumer Commission (ACCC), the Australian competition regulator.
In an interview with the ABC, the ACCC Chairman Graeme Samuel said that “would have to be a really stupid executive to be involved in cartel activity after July last year. What we’ve got here is, in a sense, a double problem that’s occurred for the airlines involved. One is: they’ve had to pay significant penalties. The second is: serious reputational damage.”
The European Union regulator has imposed the record fine due to airlines including British Airways, SAS, Cargolux, Singapore Airlines, Cathay Pacific, Qantas, Japan Airlines, Air Canada, and LAN Chile allegedly fixing some cargo routes. Europe’s largest airline, Air France-KLM will be penalized the largest amount of $372 million.
European Affairs Minister Pierre Lellouche said he was “shocked by the totally disproportionate nature of this fine in terms of the losses potentially suffered by users of (the) freight service of the group’s companies.”
The fine “will inflict considerable damage on the French air sector and adds to losses suffered by the sector in 2009, in the context of the financial crisis,” he said in a statement.
The EU’s competition watchdog had issued complaints to 26 airlines, due to an international initiative that targeted executives, resulting in jail time, fines, and settlements. The U.S. authorities have made criminal charges against 14 executives for price-fixing and 18 airlines have already been fined around $16 billion.
“It is deplorable that so many major airlines coordinated their pricing,” EU Competition Commissioner Joaquin Almunia said in a statement. Extra security costs in the aftermath of the attacks on Sept. 11, 2001, also weren’t “an acceptable reason to stop competing,” Almunia told reporters in Brussels yesterday.
There has already been a class action lawsuit related to the price fixing activities in Australia, said a local law firm.
“The airlines have been trying to deny that there is a case to answer in this country,” Brooke Dellavedova of class-action law firm Maurice Blackburn said.
“Given Australia’s geographic isolation and our reliance on international air freight, there is no doubt that Australian businesses were affected.”
Maurice Blackburn is representing several businesses that are alleging that their air cargo shipments have been overcharged, seven airlines are involved including British Airways and Qantas.
Australia’s flagship airline Qantas “acknowledged the improper conduct” by its freight department, however it will formally respond when the full decision has been confirmed next week, according to an e-mailed statement. In 2008, the Sydney-based company had already received a $20.1 million penalty for involvement in the cartel, by the Australian Competition and Consumer Commission (ACCC), the Australian competition regulator.
In an interview with the ABC, the ACCC Chairman Graeme Samuel said that “would have to be a really stupid executive to be involved in cartel activity after July last year. What we’ve got here is, in a sense, a double problem that’s occurred for the airlines involved. One is: they’ve had to pay significant penalties. The second is: serious reputational damage.”
