Air France-KLM to pay $87m price-fixing fine

13th Jul 2010
Air France-KLM to pay $87m price-fixing fine

Air France-KLM has agreed to pay $87m in settlement for civil damages relating to price fixing in its cargo division. The France-Dutch aviation giant follows the likes of British Airways, Cathay Pacific, Qantas and Korean Air, which have all paid significant fines following an undercover investigation into global air freight price fixing between 2000 and 2006.

The US Department of Justice has imposed fines of more than $1.6bn as a result of the investigation, which began in 2006. The settlement by Air France-KLM must also be agreed by US courts.

The investigation has uncovered that the airlines involved created a series of global cargo cartels, colluding on prices on specific cargo routes and then monitoring rates to ensure that the rates were enforced.

Last year, Franciscus Johannes de Jong, the former vice-president of cargo sales at the KLM cargo subsidiary, Martinair, agreed to serve eight months in jail and pay a $20,000 fine.

This sparked a series of civil damage claims from former clients of Air France-KLM and its subsidiaries.


The monies from the settlement will be used to repay only Air France-KLM’s direct cargo customers. Indirect customers, who used a third party to transport their goods, are excluded from the settlement in the US.

Michael Hausfeld, one of the co-lead counsels in the US case, told the Financial Times: “This is an important settlement and a major step forward.”

The DoJ said the anti-trust investigation remains an “open matter”. Air France-KLM said in a statement that the investigation by the European Commission is still pending, raising the possibility of further fines and payments.

The probe by European Union regulators is believed to be in its final stages, but arguments over the potential fines have been particularly intense – not least because of the current troubles of the airline industry.

It is unlikely that any announcement will be made until after the summer break in Brussels.



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