Global insight

10 biggest settlements in air cargo’s shameful price-fixing

Air cargo price-fixing settlement tops US$1.2billion

VOLUNTARY settlement payments in a class-action price-fixing litigation case brought by air cargo customers against 28 major airlines has reached US$1.2 bn.

Air New Zealand is the latest carrier to settle the litigation (see updated list, below), having agreed to pay $35m to direct purchasers of airfreight shipping services, says a statement from Hausfeld, a global claimants’ law firm dedicated to handling such complex litigation, writes Thelma Etim.

The 10-year-old air cargo shipping services antitrust litigation is being held in the United States District Court for the Eastern District of New York.

According to Brent Landau, partner at Hausfeld: “This settlement – along with the more than $1bn in recoveries for victims of this worldwide cartel – demonstrates the importance of private enforcement of the antitrust laws.”

The alleged price-fixing scandal has been the subject of a string of antitrust actions around the globe, with big settlements from multi-national airlines in Europe and the USA.

The freight forwarders claimed that 28 airlines colluded to develop and implement ‘an industry-wide index for calculating fuel and security surcharges that were applied to thousands of routes flown worldwide by the defendants’, including flights to and from the USA, and were able to adjust those rates 28 times between January 1, 2000 and September 30, 2006, according to a report and recommendations by US Magistrate Judge Viktor Pohorelsky in the US District Court in October 2014.

All carriers in the New York case have always denied any wrongdoing.

After 10 years fighting the action, the New Zealand national carrier’s general counsel John Blair admits that the risks were reduced by settling, say reports. “There was no credible evidence that any Air New Zealand employee participated in any conspiracy, but the potential for an unexpected verdict was not an acceptable commercial risk for the airline,” he adds.

New Zealand’s national carrier was one of two airlines still holding out in the suit, leaving Air India as the sole remaining defendant.

Defendant

Settlement Amount

Lufthansa

85,000,000

Air France/KLM/Martinair

87,000,000

American Airlines

5,000,000

Japan Airlines

12,000,000

SAS

13,930,000

All Nippon Airways

10,400,000

Cargolux

35,100,000

Qantas

26,500,000

Thai Airways

3,500,000

British Airways

89,512,000

Lan/ABSA

66,000,000

Malaysia Airlines

3,200,000

South African Airways

3,290,000

Saudia

14,000,000

Emirates

7,833,000

El Al Israel Airlines

15,800,000

Air Canada

7,500,000

Korean Air

115,000,000

Singapore Air

92,492,442

Cathay Pacific

65,000,000

China Airlines

90,000,000

Nippon Cargo Airlines

36,350,000

Asiana Airlines

55,000,000

EVA Airways

99,000,000

Polar Air Cargo/Atlas Air Worldwide Holdings

100,000,000

Air China

50,000,000

Air New Zealand

35,000,000

Total

1.223 billion

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