EU ready to reimpose €790M airline fine

European Union regulators are getting ready to fine airlines $850 million for operating a cargo cartel that had been rejected by an EU appeal court. And the Airlines’ failure to reach a settlement could cause cost them more.

European Union regulators are reported by to be close to reimposing fines up to €790 million euros on airlines for operating a cargo cartel that had been overturned by a European court 15 months ago.

The European Union originally fined 11 carriers €790 million euros in November 2010 for colluding on fuel and security surcharges between 2000 and 2006, following whistle-blowing by Lufthansa and a four-year investigation that was carried out alongside a probe by US antitrust authorities.

  • Air Canada
  • Air France
  • British Airways
  • Cargolux
  • Cathay Pacific
  • Japan Airlines
  • LAN Chile
  • Martinair
  • Qantas
  • SAS
  • Singapore Airlines

The EU General Court annulled the fines in December 2015, following an appeal by eight of the carriers, saying the competition regulators had employed “contradictory” arguments.

The European Commission, the EU’s executive, arguing the court rulinEuropean Commissiong was essentially procedural, sought to strike a deal with the carriers to settle the case a few weeks ago but failed to reach agreement.

As a result, the European competition commissioner, Margrethe Vestager, is said to be close to reimposing the fines on the carriers, some of which have already been successfully sued by their customers.

Air France and KLM, which merged in 2004, received the largest combined fine of €310 million, followed by British Airways, which was hit with a €104 million penalty.

Singapore Airlines, Cargolux, SAS, Cathay Pacific, Japan Airlines, Air Canada, Qantas, LAN Chile, and Martinair were also found guilty of price fixing, taking the total fines to €799.5 million.

Lufthansa was also found guilty of price fixing, but escaped fines because it had alerted the Commission to the cartel and cooperated in its investigation.

The airlines have paid out hundreds of millions of €’s in damages claims by customers since the original European Union ruling found them guilty of price fixing.