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Qantas fine stands when all others vanish in cartel case

December 18, 2015 Aviation, Headline News No Comments Email Email

egtmedia59A landmark European decision in 2010 to fine some of the world’s biggest airlines almost EUR 800 million (about AUD 1.2 billion) for colluding on air cargo prices has been overturned – and Qantas may end up being the only airline to pay a fine.

The air cargo case was the largest cartel lawsuit in European history. The decision yesterday by the EU’s General Court to overturn the earlier European Union ruling, and consequent antitrust fines, sees the Air France-KLM Group and British Airways as the biggest winners among 11 carriers that won their court battle against the fines.

Qantas was the only carrier not to appeal its fine, which was EUR 8.88 million (about AUD 13.41 million at today’s rates).

The airlines involved in the case were Qantas, Air Canada, Air France-KLM, British Airways, Cathay Pacific, Cargolux, Japan Airlines, LAN Chile, Martinair, SAS and Singapore Airlines. Lufthansa was the whistleblower, so escaped the fines. All the airlines appealed their fines – except Qantas, which “copped it sweet” as the saying goes.

As a result, ironically, the fine against Qantas is the only decision still standing. As Bloomberg Business noted: “The Australian carrier, the only one not to file a challenge, may bear the brunt of damages claims as the sole company still liable for this infringement.”

The decision not to appeal would seem to be a blunder on the part of Qantas, though hindsight is easy.

The air cargo litigation saw big companies including Ericsson, Philips, Robert Bosch and Schenker file damages claims worth up to EUR 7 billion in courts in the Britain, the Netherlands and Germany.

Following the European Commission’s 2010 decision, more than a thousand companies filed complaints. Brussels-based news website Politico reports they included industries ranging from flower importers, car manufacturers and logistics firms “making it the largest cartel lawsuit in European history”.

In November 2010, the European commissioner for competition from 2009 to 2014, Joaquin Almunia, announced he was fining 11 airline cargo companies a total of fractionally under EUR 800 million. The Commission said the airlines had participated in a worldwide cartel to fix the way they would pass higher fuel and security costs on to customers.

Now the airlines’ appeal has been upheld, both the Commission and the airlines have two months to launch a counter appeal. Politico notes that, in the past, “the Commission has reacted to losing before the court by fine-tuning its arguments and reimposing fines”.

If so, perhaps Qantas has got off lightly.

Written by Peter Needham

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