Brussels re-imposes hefty fines against air cargo companies

EC Headquarters In Brussels

Source Getty

Air France-KLM (AIRF.PA), British Airways (ICAG.L) and nine other airlines were hit with a 776 million euro ($835.5 million) fine by European Union antitrust regulators on Friday for taking part in an air cargo cartel more than a decade ago.

In December 2015, the General Court annulled the Commission's decision against the cartel participants that appealed, concluding that there had been a procedural error.

"The decision confirms that the Commission will not let cartels go unpunished".

Another cartel member, Lufthansa, and its subsidiary, Swiss International Air Lines, received full immunity from fines after they cooperated with the investigation.

Almost all of the companies charged in 2010 appealed the decision in the EU General Court, which voided the Commission's decision in 2015 over a procedural error but without disproving that there had been a cartel.

It faces a fine of about $30 million (21 million euros).

Air France was fined 182.9 million euros ($196.32 million), the highest, followed by KLM at 127.1 million ($136.43 million), British Airways at 104.4 million ($112.06 million), Cargolux at 79.9 million ($85.76 million) and Singapore Airlines (SIAL.SI) at 74.8 million ($80.29 million).

"Working together in a cartel rather than competing to offer better services to customers does not fly with the commission", Vestager said.

"Air France-KLM will analyze the new decision, and the advisability of appealing it", the group said in a statement. However, it did not rule on the existence of the cartel.

The EC said this error has now been addressed and had no bearing on the original "anti-competitive behaviours targeted by the Commission", which occurred between 1999 and 2006.

The original total of €799.45 million applied by the Commission in November 2010 included a 12th airline - Qantas. Since then the company's revenue has dropped "significantly" and the sanction is based on its 2016 turnover. Furthermore, the fines for the majority of carriers were also reduced for their cooperation with the Commission under the Leniency Notice.

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