American Airlines turns evidence, gets off with US$5 million

AMERICAN AIRLINES parent, AMR Corp (AMR), has agreed pay US$5 million to shippers to settle a New York class-action suit seeking damages for global price-fixing, and produce evidence to charge other carriers engaged in the scheme, reports Bloomberg.

AMR is the first American carrier to settle during six years of investigations into alleged collusion into the setting of fuel surcharges by multiple airlines since 2006, reports Dow Jones.

Fort Worth-based American does not admit culpability and was only added as a defendant in the case to seek court approval for the deal, AA spokesman Tim Wagner told Bloomberg.

"American Airlines has done nothing wrong," Mr Wagner said. "Litigation is an expensive and uncertain proposition and avoiding the cost and the inconvenience of trial made paying the settlement the best financial decision."

American promises to provide witnesses, documents and electronic data to help shippers in similar cases in Canada, Australia, South Korea and other countries, said the shippers' lawyer, Michael Hausfeld, of Hausfeld & Co LLP.

The deal was made before federal court in Brooklyn, New York, and is the first time an US airline has agreed to help prosecute a cartel outside the US, said Mr Hausfeld.

"It is an important step forward for shippers in Europe and around the world and demonstrates that companies can act responsibly to resolve competition disputes without resorting to excessive or protracted litigation," he said.

Settlement talks with American started after the EU in 2007 gave the carrier a so-called statement of objections related to the cartel, Hausfeld said in court papers.

Hausfeld later concluded that "while AA did face some risk of liability, it would be difficult for plaintiffs to obtain a judgment against it, given the evidence," according to the court filing.

More than a dozen airlines have already settled with regulators, paying more than $1.5 billion in fines amid probes into fuel surcharges by regulators in Europe, North America and Asia that have also ensnared freight forwarders, US railways and ocean shipping companies.

British Airways last week issued legal proceedings against 32 airlines - including AMR, its alliance partner, in an attempt to have them share the burden of any damages it may have to pay arising from a cargo price-fixing suit it faces in London.
(Source:www.schednet.com)