Air France-KLM Loses Case to Quash EU Cartel Fine

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Air France, KLM and Martinair still have to pay more than 325 million euros in fines because of prohibited price-fixing for air freight transport. That has been decided by the General Court of the European Union. The part for KLM amounts to 127 million euros.

 

Eight other air freight carriers that were part of the cartel between the end of 1999 and the beginning of 2006 have also been fined for cartel formation. The total amount is almost 790 million euros.

According to the committee, the cartel members had made mutual agreements for more than six years about, for example, fuel and safety surcharges that were charged to shippers. For this, the watchdog in Brussels already imposed a fine of almost 800 million euros in 2010, but the European court annulled this in 2015 due to a formal error.

In 2017, the committee again imposed a fine, with only Martinair being assessed less highly. The Franco-Dutch airline group and the other eight airlines appealed this decision. They demanded the annulment of the Commission’s decision.

In addition to Air France, KLM and Martinair, British Airways, Air Canada, Cargolux, Cathay Pacific, Japan Airlines, Singapore Airlines, LAN Chile, and SAS participated in the cartel. Lufthansa was also involved but escaped a fine because it brought the abuses to the European Commission. The same applies to subsidiary Swiss.

The Court of First Instance makes a slightly different calculation in the final settlement than the Commission. For example, the fines for Japan Airlines, Air Canada, British Airways, Cathay Pacific Airways, SAS Cargo, and Lan Chile are slightly reduced for different reasons.

The parties can appeal within two months to the European Court of Justice, of which the General Court is a part. A spokeswoman said that Air France-KLM is still investigating whether such an appeal is feasible. At the end of last year, the aviation combination had reserved 350.6 million euros to pay any cartel fines. In the event of an appeal, the fine does not yet have to be paid.

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