The EU Court of Justice has fined 8 carriers for continuous price-fixing practices and other violations of competition laws dating back to a period spanning from 2005 to 2010. The court ruling ends legal proceedings between the airlines involved and the EU competition watchdogs, that have gone on for 12 years. Although the amount of some fines was reduced by the judges, all in all the court ruling is a resounding legal defeat suffered by the airlines involved. For details pls view: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:62020TJ0757
Hardest hit is British Airways that was sentenced to pay a fine of €84.46 million vs. €104.04 million as demanded by EU judges in a previous trial. Next in line is Cargolux that has to pay €79.9 million for continuous infringements, followed by the SAS Group (€70 million), Cathay Pacific Airways (€47.14 million, down €10 million from a former decision), Japan Airlines (€28.88 million vs €35.70 million), Air Canada (€17.95 million vs. €21.04 million), and the LATAM Group (€2.24 million contrasting €8.22 million formerly demanded by the court).
The Lufthansa Group (including Swiss) was a key witness in the cartel proceedings worldwide (as were a number of other airlines). Hence, it has been exempted from paying fines due to its
cooperation with the authorities.
Upping revenues - illegally
The judges base their decisions on the fact that the incriminated carriers coordinated their activities, illegally fixing prices on both EU and global level, including determining the amount of
security or fuel surcharges demanded from forwarding agents. A complex network of mainly bilateral contacts among carriers was established to coordinate and monitor the application of the fuel
surcharges (FSC). In doing so, the precise date of application often, the court maintains, was decided at local level, with the principal local carrier taking the lead and others following. That
coordinated approach was extended to the security surcharges (SSC), and to the refusal to pay commission. This way, the airlines upped their revenues which proved to be an additional incentive
for them to continue with the illegal coordination relating to both surcharges.
Top down and bottom up
In the case of the surcharges, the responsible airline managers were in contact with each other when a change to the surcharge level was imminent, states the EU court. The same goes for their
collective refusal to pay a commission on surcharges, which was proved by documents and testimonies. In their ruling, the judges further say that frequent contact also took place at local level,
partly to better implement the instructions received from the headquarters, and adapt them to the local market conditions, and partly to coordinate and implement local initiatives. In this latter
case, the head offices generally authorized, or were informed of, the proposed action.
In its ruling, the Court of Justice dismissed all major appeals against the allegations filed by the carriers. This ends a legal dispute that has lasted for years. Further appeals against the
ruling are no longer possible. The airlines will therefore have to pay the sums set by the judges.
Heiner Siegmund
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