Singapore Airlines maintains innocence in cartel scandal

by William ASTON on November 11, 2010

Singapore Airlines said it would appeal the recent ruling from the European Commission claiming it has been involved in the price-fixing scheme involving 13 airlines.

Analysts, however, did say that any charges were not likely to impact the carrier’s financial performances.

SIA’s cargo handling branch, along with 10 other airlines, will face a combined fee of $1.4-billion. The charges stem from an airfreight cartel uncovered by US and UK authorities in 2007. Air France, BA and Qantas have all been charged for their involvement as well. The cartel was first exposed in a raid in 2007, after operating for six years up until February 2006.

Lufthansa, which blew the horn on the cartel and was also involved, will not face fines because of its co-operation with authorities. According to SIA boss Chew Choon Seng, Singapore Airlines is adamant that it had nothing to do with the cartel and will move to appeal the decision. He added that the group was disappointed it had been included among the accused.

While the hefty fine will not have a significant impact on the airline’s bottom line, analysts have said that it could hurt the carrier’s shareholdings. In the wake of the announcement, shares for the group dropped 1.23 per cent.

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