Cartel Digest

Air Cargo

Air Cargo
  Overall Cartel Period 2001-2006
  Participants Societe Air France/KLM Royal Dutch Airlines; Korean Air Lines Co., Ltd.; British Airways Plc.; Japan Airlines International Co., Ltd.; Qantas Airways Ltd.; Cathay Pacific Airways Ltd.; SAS Cargo Group A/S; Martinair Holland NV; Cargolux Airlines International SA; Asiana Airlines Inc.; Nippon Cargo Airlines Co., Ltd.; LAN Cargo S.A. / Aerolinhas Brasileiras S.A.; EL AL Israel Airlines Ltd.; Singapore Airlines Cargo Pte Ltd.; Northwest Airlines LLC; Polar Air Cargo LLC; China Airlines Ltd.; All Nippon Airways Co., Ltd.; EVA Airways Corp.; Cielos Airlines; Arrow Air, Inc; South Winds Cargo; Malaysia Airlines Cargo Sdn Bhd
  Total Fines (DOJ) $1.7 billion
  Total Fines (EC) €799.3 million

On February 14, 2006, the U.S. Department of Justice (“DOJ”) and the European Commission (“EC”) launched coordinated raids on the offices of a number of air cargo carriers worldwide based upon allegations that the carriers had engaged in a conspiracy to eliminate competition by fixing the rates and surcharges for international cargo.  The air cargo industry involves the international carriage of industrial and consumer products on passenger and all-cargo aircraft, with approximately $500 billion in worldwide revenues for 2008.  According to the regulators, between 1999 and 2006, cargo carriers allegedly participated in meetings and conversations in the United States, Europe and elsewhere where they agreed to fix the base rates and surcharges for international air cargo services.  Regulators in Australia, Canada, and Korea have also conducted investigations into the air cargo cartel, resulting in significant fines in each country.
 
Enforcement Highlights:

  • To date, nineteen carriers have pled guilty to price-fixing in the United States., resulting in over $1.7 billion in criminal fines obtained by the Antitrust Division of the DOJ – the largest amount in fines ever obtained from a competition investigation.  This number includes combination fines paid by three carriers for both air cargo and air passenger price fixing.
  • Air France/KLM’s fine of $350 million represents the third-largest fine ever obtained by the Antitrust Division.  Executives at eight carriers have pled guilty and six executives have agreed to serve a total of 56 months of jail time in the United States. 
  • In November 2010, the EC fined eleven air carriers a total of over €799 million.
  • Several carriers have also agreed to admit liability and pay civil fines to the Australian Competition and Consumer Commission for violating Australian law, resulting in over $50 million AUD in fines to date.  
  •  At least eight carriers have pleaded guilty in the Federal Court of Canada to participating in air cargo cartels affecting Canada.  To date, the total amount of fines in the Canadian Competition Bureau’s investigation is more than $25 million CAD.
  • The Korea Fair Trade Commission fined nineteen companies over ₩124 billion, and issued a warning to two other companies.
Company Conspiracy Period Fine (USD) Plea Date No. of Excluded Individuals Plea Agreement
Societe Air France/KLM Royal Dutch Airlines 5/01-2/06 $350 million 07/22/2008 5 Plea Agreement
Korean Air Lines Co., Ltd. 1/00-2/06 $300 million 08/24/2007 7 Plea Agreement
British Airways Plc 3/02-2/06 $200 million 08/23/2007 10 Plea Agreement
Japan Airlines International Co., Ltd. 4/00-2/06 $110 million 05/07/2008 3 Plea Agreement
Qantas Airways Ltd. 1/00-2/06 $61 million 01/14/2008 6 Plea Agreement
Cathay Pacific Airways Ltd. 5/02-2/06 $60 million 07/22/2008 2 Plea Agreement
SAS Cargo Group A/S 2/02-2/06 $52 million 07/21/2008 4 Plea Agreement
Martinair Holland NV 9/01-2/06 $42 million 07/22/2008 3 Plea Agreement
Cargolux Airlines International SA 9/01-2/06 $119 million 05/12/2009 4 Plea Agreement
Asiana Airlines Inc. 1/00-2/06 $50 million 05/09/2009 15 Air Cargo Plea Agreement - Asiana Airlines - US
Nippon Cargo Airlines Co., Ltd. 4/00-2/06 $45 million 05/08/2009 5 Plea Agreement
LAN Cargo S.A. / Aerolinhas Brasileiras S.A. 2/03-2/06 $109 million 02/19/2009 5 Plea Agreement
EL AL Israel Airlines Ltd. 1/03-2/06 $15.7 million 02/04/2009 5 Plea Agreement
Singapore Airlines Cargo Pte Ltd. 2/02-2/06 $48 million 02/08/2011 1 Plea Agreement
Northwest Airlines LLC 7/04-2/06 $38 million 08/27/2010 4 Plea Agreement
Polar Air Cargo LLC 1/00-4/03 $17.4 million 10/15/2010 3 Plea Agreement
China Airlines Ltd. 1/01-2/06 $40 million 11/03/2010 1 Plea Agreement
All Nippon Airways Co., Ltd. 4/00-2/06 $73 million 11/01/2010 2 Plea Agreement
EVA Airways Corp. 1/03-2/06 $13 million 05/27/2011 1 Plea Agreement
Malaysia Airlines Cargo Sdn Bhd 1/01-12/05 $6 million 06/14/2012  
Individual Company Prison Sentence Fine (USD) Plea Date Plea Agreement
Robert Van de Weg, Senior VP of Sales and Marketing Cargolux Airlines International SA 13 Months $20,000 12/08/2011  
George Gonzalez, Chief Commercial Officer Cielos Airlines N/A No fines imposed 11/30/2011 Plea Agreement
Guillermo Cabeza, President Arrow Air, Inc N/A No fines imposed 09/19/2011  
Luis Juan Soto, President South Winds Cargo N/A No fines imposed 09/19/2011  
Keith Packer, Commercial General Manager, BA World Cargo British Airways Plc. 8 months $20,000 11/10/2008 Plea Agreement
Bruce McCaffrey, VP, Freight for the Americas Qantas Airways Ltd. 8 months $20,000 05/15/2008 Plea Agreement
Timothy Pfeil, Area Director, Sales & Marketing, North America SAS Cargo Group A/S 6 months $5,000 08/29/2008 Plea Agreement
Franciscus Johannes de Jong, VP of Cargo Sales, Europe Martinair Holland NV 8 months $20,000 06/26/2009 Plea Agreement
Ulrich Ogiermann, President and CEO Cargolux Airlines International SA 13 months $20,000 12/08/2011  
Korea
Company Fine Date
Societe Air France ₩ 2.9 billion
Air France/KLM ₩ 3.9 billion
Air Hong Kong ₩ 108 million 01/27/2011
Air India No fines imposed
All Nippon Airways Co., Ltd. ₩ 1.6 billion
Asiana Airlines Inc. ₩ 20.6 billion 01/27/2011
British Airways Plc ₩ 838 million
Cargolux Airlines International SA ₩ 2.2 billion
Cathay Pacific Airways Ltd. ₩ 5.2 billion 01/27/2011
Japan Airlines International Co., Ltd. ₩ 4.8 billion
KLM Royal Dutch Airlines ₩ 6.8 billion 01/27/2011
Korean Air Lines Co., Ltd. ₩ 54.2 billion 01/27/2011
Lufthansa Cargo AG ₩ 10.7 billion
Malaysian Airlines ₩ 1.2 billion
Nippon Cargo Airlines Co., Ltd. ₩ 1.9 billion
Polar Air Cargo LLC ₩ 681 million 01/27/2011
Qantas Airways Ltd. ₩ 161 million 06/18/2010
Scandinavian Airlines No fines imposed
Singapore Airlines Cargo Pte. Ltd. ₩ 3.1 billion
Swiss International Air Lines ₩ 68 million
Thai Airways International Co., Ltd. ₩ 2.7 billion 01/27/2011
Australia
Company Fine Date
British Airways PLC $ 5 million 12/11/2008
Qantas Airways Ltd. $ 20 million 12/11/2008
Societe Air France/KLM NV $ 6 million 02/16/2009
Martinair Holland NV $ 5 million 02/16/2009
Japan Airlines International Co., Ltd. $ 5.5 million 04/11/2011
Cargolux Airlines International SA $ 5 million 02/16/2009
Emirates $ 10 million 10/12/2012
Cathay Pacific Airways Ltd. $ 11.2 million 12/07/2012
Singapore Airlines Cargo Pte Ltd $ 11.7 million 12/07/2012
Thai Airways International Public Company $ 7.5 million 12/17/2012
Malaysia Airlines Cargo Sdn Bhd $ 6 million 06/14/2012
Canada
Company Fine Date
Korean Air Lines Co., Ltd. $ 5.5 million 07/19/2012
Cathay Pacific Airways Ltd. $ 1.5 million 06/20/2013
LATAM Airlines Group S.A. $ 975,000 08/20/2013
British Airways Plc $ 4.5 million 10/30/2009
Cargolux Airlines International SA $ 2.5 million 10/28/2010
Qantas Airways Ltd. $ 150,000 07/07/2009
Societe Air France $ 4 million 06/26/2009
KLM NV $ 5 million 06/26/2009
Martinair Holland NV $ 1 million 06/26/2009
Europe
Company Fine Date
Air Canada € 21 million 09/11/2010
Societe Air France € 182.9 million 09/11/2010
KLM Royal Dutch Airlines € 127.2 million 09/11/2010
Martinair Holland NV € 29.5 million 09/11/2010
British Airways Plc € 104 million 09/11/2010
Cargolux Airlines International SA € 79.9 million 09/11/2010
Cathay Pacific Airways Ltd. € 57.1 million 09/11/2010
Japan Airlines International Co., Ltd. € 35.7 million 09/11/2010
LAN Cargo € 8.2 million 09/11/2010
Qantas Airways Ltd. € 8.8 million 09/11/2010
SAS Cargo Group A/S € 70.2 million 09/11/2010
Singapore Airlines Cargo Pte. Ltd. € 74.8 million 09/11/2010
Lufthansa/Swiss International Air Lines Immunity 09/11/2010