EU fines 13 airlines for price fixing

by Ella FAIRCHILD on November 9, 2010

British Airways and 12 other airlines face fines of up to 800 million euros as the EU competition regulators tackle a price-fixing cartel discovered in 2007.

The European Commission charged 13 carriers in December 2007 after it came to light that they were operating a cartel on airfreight trade. The charges followed a joint raid with the US Department of Justice. According to a source, six of the carriers facing fines are non-European.

Competition Commissioner Joaquin Almunia will announce the full details of the fine and amounts officially in Brussels at 1600 GMT on Tuesday. British Airways alone could face fees of up to 120 million euros for violating EU laws, said the source.

Airlines involved in the cartel that face hefty fines include Japan Airlines, Air France, Qantas, Cathay Pacific and Singapore Airlines. The initial investigation exposed 20 carriers, however, only 13 have been officially charged.

Although the EU regulator did not give details on what airlines had been targeted, statements from Air France, Japan Airlines, All Nippon Airways, Lufthansa, Alitalia and Cathay Pacific acknowledged they were involved in the investigation. Lufthansa will not face any fines as it exposed the cartel in exchange for immunity.

The cartel, a breach of EU rules, could face 10 per cent of their global profits in fines. BA and Korean Air already paid $300 million in criminal fees for breaking US price fixing laws in 2007.

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