5 more airlines plead guilty in DOJ freight price fixing probe

A further five major international airlines have pleaded guilty to fixing air cargo rates and will pay fines totaling $504 million, the U.S. Justice Department reported Thursday.

The latest airlines to admit their roles in a multiear conspiracy were:

   Air France and KLM Royal Dutch Airlines, which now operates as Air France-KLM under common ownership by a single holding company, has agreed to pay a $350 million criminal fine, the second highest fine ever levied in a criminal antitrust prosecution.

   Hong Kong's Cathay Pacific, $60 million.

   Copenhagen, Denmark-based SAS Cargo, $52 million.

   Amsterdam, Netherlands-based Martinair, $42 million.

   If the U.S. District Court for the District of Columbia accepts the plea agreements, the total fines imposed in the DOJ's ongoing air cargo antitrust investigation will reach $1.27 billion. Other airlines to have previously pleaded guilty and paid criminal fines were British Airways ($300 million), Korean Air Lines ($300 million), Japan Airlines ($110 million) and Qantas Airways ($61 million).

   So far, only one senior airline executive, Bruce McCaffrey, the former vice president of Qantas U.S. freight operations, has been punished for his part in the price-fixing crime. In May, McCaffrey, who was facing a possible 10 years in prison and $1 million in fines, agreed to serve eight months in jail and pay a $20,000 fine under the plea agreement.

   Millions of American consumers and thousands of businesses -- from the corner store to the biggest corporation -- rely on the air transportation industry to provide the products we buy, sell, and use every day. This price-fixing conspiracy undermines our economy and harms the American people who, due to lack of true competition in this area, end up footing the bill,?said Kevin J. O honnor, associate attorney general.

   Scott D. Hammond, deputy assistant attorney general in charge of criminal enforcement for the department's antitrust division, said: the air cargo conspirators artificially raised the prices paid to ship billions of dollars of goods. When these companies and their co-conspirators got together and agreed to raise prices for air cargo shipments, American businesses and consumers ended up picking up the tab. Cathay Pacific Cargo said Thursday its fine will be taken into account in the company's interim results for the six months ending on June 30, to be announced Aug. 6. The airline said it has established a dedicated competition compliance office to ensure the company's procedures and policies continue to comply with antitrust and competition laws around the world. 

Source: American Shipper