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Air-cargo carriers fined for price-fixing

By the CNN Wire Staff
The EC said it was "deplorable" that so many major airlines coordinated their pricing to the detriment of businesses.
The EC said it was "deplorable" that so many major airlines coordinated their pricing to the detriment of businesses.
STORY HIGHLIGHTS
  • The fines amount to a total of 799 million euros
  • Cargo services were affected in the European Economic area
  • The airlines were from the world over

(CNN) -- The European Commission Tuesday fined 11 air-cargo carriers for price-fixing, a statement from the commission said.

The carriers have been fined a total of 799 million euros, or $1.1 billion, for operating a worldwide cartel which affected cargo services within the European Economic area.

The carriers are Air Canada, Air France-KLM, British Airways, Cathay Pacific, Cargolux, Japan Airlines, LAN Chile, Martinair, SAS, Singapore Airlines and Qantas.

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

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The commission said "the carriers coordinated their actions on surcharges for fuel and security without discounts over a six-year period."

"The cartel members coordinated various elements of price" from December 1999 to February 2006, the commission statement said.

"The cartel arrangements consisted of numerous contacts between airlines, at both bilateral and multilateral level, covering flights from, to and within the EEA. Airlines providing airfreight services primarily offer the transport of cargo to freight forwarders, who arrange the carriage of these goods including associated services and formalities on behalf of shippers," the commission said.

The commission said Lufthansa and its subsidiary, Swiss, got full immunity because it was the first to pass along information about the cartel.

British Airways said its portion of the fine is 104 million euros, or $144 million, in the case, which has been going on for three years.

The airline said it had already set aside 350 million pounds, which amounts to $564 million, for any possible fines. So the penalty won't affect the airline's economic stability, it said.