Skip to main content

EU fines 11 airlines more than $1 billion for cargo cartel

By the CNN Wire Staff
  • Air Canada, Air France-KLM, British Airways and other big names are among the offenders
  • The European Commission says the cargo carriers coordinated on price for more than six years
  • Air France-KLM says it plans to appeal the decision

(CNN) -- The European Commission said Tuesday it has fined 11 airlines a total of some $1.1 billion (799.5 million euros) for their participation in an air cargo cartel.

The airlines coordinated action on fuel and security surcharges for more than six years, the Commission said in a statement.

Several top-name carriers, such as Air Canada, Air France-KLM and British Airways, were among the companies slapped with fines.

Air France received the highest penalty, set at some $252 million (182.9 million euros).

"It is deplorable that so many major airlines coordinated their pricing to the detriment of European businesses and European consumers," Joaquin Almunia, vice president for competition, said in the statement. "With today's decision the Commission is sending a clear message that it will not tolerate cartel behaviour."

The cartel operated between December 1999 and February 2006, the Commission said.

Lufthansa, which brought the price-fixing scheme to the Commission's attention, faces no fines. Other carriers had their penalties reduced as they also cooperated.

Air France-KLM released a statement Tuesday acknowledging the decision and calling the fines "disproportionate."

"Moreover, the level of the fines disregards the economic hardship that the air cargo industry has suffered, and will have a distortive effect on the level playing field," said the company, adding that it plans to appeal the decision with the European Union Tribunal.

Air Canada similarly responded to the announcement.

"The amount of the fine is more than adequately covered by the $125 million provision taken by the company in 2008, and the company is studying the decision and will determine its next steps, including possible appeal," Air Canada said.

The company was fined some $29 million (21.0 million euros).

Other airlines that received fines were Japan Airlines, LAN Chile, Martinair, Cargolux, Cathay Pacific Airways, Qantas, SAS and Singapore Airlines.