Global cargo airlines hit hard for price fixing

In a move that was widely anticipated, the European Commission imposed heavy fines on eleven air cargo carriers today for price fixing.

This was part of a worldwide investigation into air cargo cartel activities, with airlines pleading guilty and paying fines in the US, Canada, Australia, New Zealand and South Korea, and ongoing investigations in those countries and others, including South Africa.

Meanwhile the U.S. justice department continues its investigation of freight forwarders guilty of price-fixing. Indeed, they are calling upon shippers to share information on any anticompetitive conduct they may be aware of by calling the Antitrust Division’s National Criminal Enforcement Section.

Each company is charged with price fixing in violation of the Sherman Act, which carries a maximum fine of $100 million per offense for corporations.  The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

While the impact on U.S. shippers has yet to be measured, this issue will be among several addressed at the upcoming National Industrial Transportation League confence next week.
“Along with security, this is something that deserves greater scrutiny,” said Richard Macomber, chairman of the NITL air cargo committee.”

The League’s 103rd Annual Meeting/ TransComp Exhibition, will be held November 14-16, 2010 in Ft. Lauderdale, FL.

The EU commission’s four-year investigation into price fixing resulted with fines totaling $1.1 billion. The hardest hit was Air France-KLM, which represents Europe’s biggest cargo airline. Its fine was $476 million. Next to be heavily fined was British Airways ($145.6 million) and Singapore Airlines ($104.7 million).