Monday 24th Oct 2016 - Logistics Manager

Airlines face £250m fine for price fixing

Five major international airlines have pleaded guilty in the United States to fixing prices for air cargo rates over a number of years and will pay a combined criminal fine of £254 million ($504 million).

The US Department of Justice named the airlines as Société Air France, Cathay Pacific Airways, Koninklijke Luchtvaart Maatschappij N.V. (KLM Royal Dutch Airlines), Martinair Holland N.V. and SAS Cargo Group A/S.

Air France-KLM, which now operates under common ownership by a single holding company, has agreed to pay a fine of £176 million ($350 million), the second largest ever levied in a criminal antitrust prosecution.

The airlines each engaged in a “conspiracy to suppress and eliminate competition by fixing the cargo rates charged to customers for international air shipments”, according to the US District Court.

The plea agreements are subject to court approval. In addition to Air France-KLM’s fine, Cathay has agreed to pay £30 million ($60 million), Martinair £21 million ($42 million) and SAS £26 million ($52 million).

If accepted by the court it will bring the total fines imposed in the Antitrust Division’s investigation in the air transport industry to more than £639 million ($1.27 billion).