Airlines may face multi-million Euro cartel fines

Air France-KLM Group, British Airways and a handful of other carriers may face multimillion antitrust fines from EU regulators within weeks after attempts to broker a settlement failed.

EU Competition Commissioner Margrethe Vestager is seeking to re-impose penalties of nearly €800m for a cargo cartel thrown out on procedural grounds by an EU court in 2015.

The final amount of the fines could differ slightly from those imposed earlier. Many of the airlines hoped to reach a settlement to limit follow-on lawsuits from customers and avoid more court fights with the EU, the sources said.

But other airlines couldn’t agree on a potential accord, and the case could now rumble on for years with likely court appeals. Eleven airlines were fined €790.5m in 2010, with Air France-KLM ordered to pay about €310m and IAG’s BA told to pay a €104m penalty.

The Commission said the companies ran a global scheme affecting cargo services in Europe by coordinating their actions on surcharges for fuel and security without discounts over six years. Lufthansa wasn’t fined because it informed the EU.

Air France-KLM, British Airways, Lufthansa, SAS, Japan Airlines, Air Canada, Latam Airlines Group, Singapore Airlines, Cathay Pacific Airways and Cargolux Airlines International didn’t immediately respond to requests for comment.

Airlines had so-called “state-of-play” meetings with regulators by phone last week, sources said.

The carriers won the court battle in 2015 when judges criticised “inconsistencies” in the EU decision, cataloguing blunders in the way the case was handled. Some of those issues still remain with the decision the EU may readopt, which could see airlines succeed in potential court appeals.

Ms Vestager, often accused of unfairly singling out US firms, is keen to highlight the penalties for mainly European airlines before a visit to Washington , sources said. - Bloomberg