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Friday 24th of May 2013
Airlines fined 800 million euros for price fixing
European Union regulators announced on Tuesday that a group of airlines involved in air cargo price-fixing will have to pay a fine of nearly €800 million. The cartel, including British Airways and Air France-KLM, has been slammed for coordinating cargo and fuel prices between 1999 and 2006. Joaquin Almunia, European Competition Commissioner, described the cartel as deplorable.
He added that for so many airlines to have been involved in damaging European business was unacceptable. The announcement could have further repercussions for the carriers as it is likely a number of companies will want to bring their own lawsuits against the airlines. Air France-KLM is already facing an attack for cargo price fixing from companies including Philips and Ericsson which could cost it around €500 million.
The Franco-Dutch group was the most heavily penalised by the EU and has been ordered to pay €340 million. The airline said this was a disproportionate amount of money and intends to appeal. Other airlines involved in the case which may appeal include Air Canada, which was told to pay €21 million and SAS, ordered to come up with €70.2 million.
Other airlines fined by the European Commission include Qantas, which will have to pay €8.9 million for its involvement in the price-fixing; Singapore Airlines, fined €74.8 million; Cathay Pacific, told to pay €57.12; Japan Airlines, with a fine of €35.7 and UK flag-carrier British Airways, fined €104 million.
Although Lufthansa was also found guilty of cartel involvement, the airline has immunity for being the carrier which brought the matter to the Commission’s attention in the first place.
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