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Jan 6, 2016

11 airlines were accused of running an air cargo cartel in Europe and were fined €790m, that has recently been overturned by EU’s second highest court

The History of the case

In 2010, the European Commission antitrust authorities fined 11 airlines for running an air cargo cartel in Europe for more than six years.

The General Court found out that the arguments the antitrust authorities had relied on were “contradictory” and whatever evidence they had provided were of price fixing by smaller group of companies on specific routes, delivering air cargo to Pakistan and other countries around the globe.

With this ruling, the EU competition authorities have faced second biggest setback within a month.

The commission ran an inquiry about the conspiracy in the credit insurance market for four years but that also flopped and Brussels had to clear 13 major banks under investigation. The reason here was also “lack of evidence”.

Why and when did it all started?

In 2006, the officials received some complaints about fuel surcharges and in seek of evidence, they raided the offices of several air cargo companies in the wake of inquiry into the airlines cartel.

It was suspected that the companies were co-ordinating the pricing, ever since the case has been watched closely. The commission still has the right to appeal to the EU Court of Justice.

In December 2007, a formal investigation was opened and as many as 20 air cargo carriers were probed but only 11 were fined later. For supplying information on the alleged cartel, Lufthansa cargo and its Swiss Airlines subsidiary were not penalised.

Who are the beneficiaries?

The biggest beneficiaries would be Air France, which was fined €182.9m, KLM with €127.2m, BA with €104m. Then there are other carriers who had been fined below €100m like Cargolux with €79.9m, Singapore Airlines with €74.8m, SAS with €70.2m,

Cathay Pacific with €57.1m, JAL with €35.7m, Martinair with €29.5m, Air Canada with €21m, Qantas with €8.9m and LAN Chile with €8.2m if this decision on Wednesday’s stands.

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