Airfreight: EU-Commission re-adopts decision and fines cartel

The European Commission imposed a fine of about EUR 776 million on 11 air cargo carriers for operating a price–fixing cartel

Airfreight: EU-Commission re-adopts decision and fines cartel

The European Commission has re-adopted a cartel decision against 11 air cargo carriers and imposed a fine totalling EUR 776.5 million for operating a price–fixing cartel. The Commission’s original decision was annulled by the General Court on procedural grounds.

Commissioner Margrethe Vestager, in charge of competition policy, said: “Millions of businesses depend on air cargo services, which carry more than 20 percent of all EU imports and nearly 30 percent of EU exports. Working together in a cartel rather than competing to offer better services to customers does not fly with the Commission. Today’s decision ensures that companies that were part of the air cargo cartel are sanctioned for their behaviour.”

In November 2010, the Commission imposed fines of nearly EUR 800 million on 11 air cargo carriers who participated in a price-fixing cartel, from December 1999 to February 2006, in the airfreight services market covering flights from, to and within the European Economic Area. The cartel arrangements consisted of numerous contacts between airlines, at both bilateral and multilateral level to fix the level of fuel and security surcharges.

The companies fined in 2010 were Air Canada, Air France-KLM, British Airways, Cargolux, Cathay Pacific Airways, Japan Airlines, LAN Chile, Martinair, Qantas, SAS and Singapore Airlines. A 12th cartel member, Lufthansa, and its subsidiary, Swiss International Air Lines, received full immunity from the fines imposed in 2006, as it brought the cartel to the Commission’s attention and provided valuable information. Furthermore, the fines for the majority of carriers were also reduced for their cooperation with the Commission under the Leniency Notice.

The Commission maintains that these air cargo carriers participated in a price-fixing cartel and is adopting a new decision and re-establishing the fines. This new decision addresses the procedural error identified by the General Court while remaining identical in terms of the anticompetitive behaviours targeted by the Commission.

The individual fines are as follows:

  Fine (EUR)* Reduction under the Leniency Notice
Air Canada 21 037 500 15%
Air France 182 920 000 20%
KLM 127 160 000 20%
Martinair 15 400 000 50%
British Airways 104 040 000 10%
Cargolux 79 900 000 15%
Cathay Pacific Airways 57 120 000 20%
Japan Airlines 35 700 000 25%
LAN Chile 8 220 000 20%
SAS 70 167 500 15%
Singapore Airlines 74 800 000  
Lufthansa 0 100%
Swiss International Air Lines 0 100%

(*) Legal entities within the undertaking may be held jointly and severally liable for the whole or part of the fine imposed.