Court orders airlines to pay a total of $16 million in penalties for price fixing

16 February 2009

The Federal Court in Sydney has ordered pecuniary penalties against Société Air France (Air France) & Koninklijke Luchtvaart Maatschappij NV (KLM) totalling $6 million, Martinair Holland NV (Martinair) of $5 million and Cargolux International Airlines S.A. (Cargolux) of $5 million for breaching the price fixing provisions of the Trade Practices Act 1974.

The Australian Competition and Consumer Commission instituted proceedings against each of the four carriers on 10 February 2009 alleging they each reached understandings with other international airlines in relation to the imposition of fuel surcharges applied to international carriage of air cargo during that period between early 2003 and 2006.

Air France and KLM admitted to making and giving effect to illegal price fixing understandings with Lufthansa, repeatedly exchanging assurances with Lufthansa in the implementation of fuel surcharge increases for international carriage of air cargo across their global networks.

Martinair admitted that by no later than early 2003, it had arrived and gave effect to illegal price fixing understandings with KLM and Cargolux that they would have discussions and exchange and confirm information with each other in relation to the application of fuel surcharges on cargo carried internationally by air across their respective global networks.

Cargolux admitted to making and giving effect to illegal price fixing understandings with each of Lufthansa, Air France and KLM that each of them would impose a fuel surcharge on cargo carried internationally by air across their networks, (except where local conditions in a particular port or in a particular geographic area prevented the imposition, or full imposition, of the fuel surcharge).

"This matter sends a clear message to those involved in cartel behaviour – the ACCC will not stop its endeavours to identify and bring to an end illegal price fixing conduct," Australian Competition and Consumer Commission Chairman, Mr Graeme Samuel, said today.

Justice Lindgren also made orders restraining the parties from engaging in similar conduct for a period of five years and to each pay a contribution towards the ACCC's costs.

Today's penalties combined with those recently ordered against Qantas ($20 million) and British Airways ($5 million) bring the total pecuniary penalties ordered against the illegal cartel to $41 million.

Cooperating parties are continuing to assist the ACCC's ongoing investigations with a view to further action against other airlines.

Media inquiries: Ms Lin Enright (02) 6243 1108 or 0414 613 520
General inquiries: Infocentre 1300 302 502

Release number: 
NR 029/09
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