Major Carries Plead Guilty, Pay Fines for Cargo Price Fixing

Major international airlines Air France, Cathay Pacific Airways Limited, KLM Royal Dutch Airlines, Martinair, and SAS Cargo Group A/S have agreed to each plead guilty and pay criminal fines totaling $504 million for participating in a multi-year conspiracy to fix prices for air cargo rates, the Department of Justice has announced.

Of the $504 million in fines, Air France-KLM, which now operates 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.

According to the charges filed in the U.S. District Court for the District of Columbia, the airlines each engaged in a conspiracy to suppress and eliminate competition by fixing the cargo rates charged to customers for international air shipments.

The charged conduct affected billions of dollars of consumer and other goods –including produce, clothing, electronics and medicines- shipped by these airlines and their competitors in the air cargo industry. The companies have each agreed to cooperate with the Department’s ongoing investigation.

The plea agreements are subject to court approval. Along with Air France-KLM’s $350 million fine, Cathay has agreed to pay a $60 million criminal fine, Martinair has agreed to pay a $42 million criminal fine, and SAS has agreed to pay a $52 million criminal fine.

If the court accepts the plea agreements, it would bring the total fines imposed in the Antitrust Division’s investigation in the air transportation industry to more than $1.27 billion, marking the highest total amount of fines ever imposed in a criminal antitrust investigation.