Cargolux fined. Again.

The European Commission has fined 11 airlines almost 800m euros (£690m) for fixing the price of air cargo between 1999 and 2006.  Had the Commission not intervened the "deplorable" cartel "would have continued", said EU Competition Commissioner Joaquin Almunia.  The illegal cartel had harmed both companies and consumers, he said.

British Airways was fined 104m euros, Air France-KLM 340m euros and Cargolux Airlines 79.9m euros.  The fines follow lengthy investigations by regulators in Europe, the US and Asia, dating back to 2006.  The EU said that the airlines "co-ordinated their action on surcharges for fuel and security without discounts", between early 1999 and 2006. "The carriers contacted each other so as to ensure that worldwide air freight carriers imposed a flat rate surcharge per kg for all shipments."

The Commission imposed the biggest fine - 340m euros - on Air France-KLM, which was formed from a merger in 2004 and which now owns Martinair, which was also fined.  "It is deplorable that so many major airlines coordinated their pricing to the detriment of European businesses and European consumers," said Mr Almunia.  "With today's decision the Commission is sending a clear message that it will not tolerate cartel behaviour."

Airline: Fine (euros)
Air France-KLM (includes Martinair): 339.6m
British Airways: 104m
Cargolux: 79.9m [Click here to read about their earlier $124m fine in the USA]
Singapore Airlines: 74.8m
SAS: 70.2m
Cathay Pacific: 57.1m
Japan Airlines: 35.7m
Air Canada: 21m
Qantas: 8.9m
LAN Chile: 8.2m

BA said it had already made a £350m provision for any possible fines over the cargo price fixing.  A BA spokesman said the airline's fine fell "within the provision made by the company in its 2006/7 report and accounts".  The German carrier Lufthansa escaped a fine because it alerted the regulatory authorities to the cartel.  The maximum fine the Commission could have imposed on any single carrier was 10% of their 2009 turnover.

The US Department of Justice has already charged 18 airlines and several executives in its investigation of the cargo cartel and imposed more than $1.6bn (£997m) in fines.  The Commission's decision will have an impact on several pending legal actions by European companies against some of the airlines.  A group of firms, led by the Swedish telecoms group Ericsson and Dutch electronics giant Philips, are suing Air France-KLM and its Martinair subsidiary for 400m euros.

$124 million to keep out of court

It appears that Infratil's best friends Cargolux are getting their arses kicked for their part in an international criminal conspiracy. Two conspiracies, in fact.

The US Department of Justice has accused several airlines of engaging in a conspiracy to eliminate competition by fixing the international cargo rates they charged, from at least 2001 through 2006. Three of the airlines have coughed up fines to avoid the presumably more expensive rigmarole of going through the courts. See Reuters for more grisly details. The red-handed three (and their guilt money) are:

• Japan-based Nippon Cargo Airlines Co ($45 million)
• Korea-based Asiana Airlines Inc ($50 million)
• Luxembourg-based Cargolux Airlines International ($119 million)

Dear reader, your eyes do not deceive you: that's $119,000,000 worth of naughtiness. But they are contrite:

Cargolux Chairman Marc Hoffman said yesterday that his airline had "cooperated intensively with the DOJ and the other authorities throughout the investigation and will continue to do so." He added that the company had "reviewed and reinforced its competition compliance program." ATW Online

Meanwhile, in another part of the globe, the Australian Competition and Consumer Commission (ACCC) has also been investigating cargo price-fixing, and collusion on fuel surcharges, between 2003 and 2006. Once again, Cargolux have sought to save themselves some hefty legal bills and have offered the ACCC A$5 million worth of 'sorry'.

"Cargolux has cooperated intensively with the ACCC and the other authorities throughout the investigation and the legal proceedings and will continue to do so," Chairman Marc Hoffmann said. RoutesOnline

Familiar words.

As I typed this, and registered the fact that even the smaller fine is more money than Manston has ever made, I had a fleeting mental image of Infratil as an impressionable adolescent hanging out with crooks just because of the cash they can flash.

It's a dirty dead-end business guys, and you're in with a bad crowd.