[Anonymous]

[Potakas]

I didn’t know anything about this fixing price issue.. I read this one today from Wall Street Journal.

LONDON—British Airways PLC has issued legal proceedings against 32 airlines in an attempt to have them share the burden of any damages it may have to pay arising from fixing the price of cargo.

BA is being sued by 250 companies for compensation after it pleaded guilty in the U.S. for being part of a cartel between 2000 and 2006.

A spokesman for BA confirmed it is conducting legal proceedings against the airlines. “We will continue to contest any class actions brought by cargo customers,” he added.

The proceedings relate to an action brought against BA by two flower importers on a representative basis in the English High Court by Hausfeld & Co. The action is backed by a growing group of other shippers, and other actions are also pending in Australia, Canada, New Zealand and South Korea.

Hausfeld said the airlines which BA have issued proceedings against include Air France-KLM, Qantas Airways Ltd. and Deutsche Lufthansa AG.

“We hope that this will be a positive move in that it will encourage airlines to recognize their European liability to shippers and to start the process of making sensible commercial settlements,” Anthony Maton of Hausfeld said.

Air France-KLM recently announced an $87 million settlement of its U.S. liabilities arising from the cartel, which followed an earlier $85 million settlement reached by Lufthansa. Lufthansa and Air France-KLM declined to comment on the recent developments. Qantas couldn’t immediately be reached.

Hausfeld said BA and other airlines have pleaded guilty to price fixing to regulatory authorities in the U.S., Australia and Canada, and were recently fined by the regulatory authority in South Korea.

Three years ago, BA settled cargo and passenger price fixing claims with the U.S. Department of Justice and paid a cumulative fine of $300 million.

http://online.wsj.com/article/SB10001424052748703294904575384794238854002.html

Potakas

[Potakas]

The European Commission today imposed a 104 million euros (about £90m) fine on British Airways for its part in cargo route price fixing involving a number of airlines.

The EC fine follows penalties inflicted on BA in America, Canada and Australia for the offence which involved fuel surcharges on international airfreight.

Air France and Dutch carrier KLM were among other airlines also fined today by the EC.

Air France was fined the most – 183 million euros (about £159 million) – and in total the airlines involved were fined nearly 800 million euros (about £700 million).

The Commission said BA and the other carriers coordinated their action on fuel surcharges over a period of six years.

“It is deplorable that so many major airlines coordinated their pricing to the detriment of European businesses and European consumers,” said European Competition Commissioner Joaquin Almunia.

“With today’s decision the Commission is sending a clear message that it will not tolerate cartel behaviour.”

The cartel operated from December 1999 to February 2006, said a Commission statement.

“The cartel arrangements consisted of numerous contacts between airlines, at both bilateral and multilateral level, covering flights from, to and within the EEA (European Economic Area).

“Airlines providing airfreight services primarily offer the transport of cargo to freight forwarders, who arrange the carriage of these goods including associated services and formalities on behalf of shippers.”

The cartel began as a discussion between the airlines on fuel surcharges: “The carriers contacted each other so as to ensure that worldwide air freight carriers imposed a flat rate surcharge per kilo for all shipments.

“The cartel members extended their cooperation by introducing a security surcharge and refusing to pay a commission on surcharges to their clients (freight forwarders).”

The aim, said the Commission, was to ensure that all carriers applied the surcharges and that any increases or decreases of the surcharge levels were equally applied, in full, but all in the cartel.

“By refusing to pay a commission, the airlines ensured that surcharges did not become subject to competition through the granting of discounts to customers. Such practices are in breach of the EU competition rules,” said the Commission statement.

The Commission said it set the levels of fines against the various airlines taking into account “the sales of the companies involved in the market concerned, the very serious nature of the infringement, the EEA-wide scope of the cartel and its duration”.

All carriers received a fine reduction of 15% because of what the Commission called a “general regulatory environment in the sector which can be seen as encouraging price co-ordination.

Four carriers, including BA, were also granted a 10% reduction for their “limited participation” in the illegal cartel deal.

Lufthansa received full immunity under the Commission’s “Leniency Programme”, because it brought the cartel to the Commission’s attention and provided “valuable” information.

The maximum fine the Commission could impose on any single carrier is 10% of their 2009 turnover.

http://www.independent.co.uk/travel/news-and-advice/ba-fined-over-cargo-route-price-fixing-2129549.html

Regards,

Potakas

[Author]

Posts