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Brussels re-imposes hefty fines against air cargo companies

The European Union has re-imposed a massive fine on air cargo companies for colluding to fix the level of fuel and security surcharges. The previous attempt to make the firms pay a penalty had been thrown out by a court.

The European Union on Friday re-imposed a fine on 11 air cargo companies totaling $835 million (776 million euros) after the original decision was thrown out by a high court on a procedural issue.

After the initial fine had been annulled in 2015, the European Commission said Friday it fixed the original error and decided to re-establish the fines since the EU's General Court never rejected the antitrust case as such.

The Commission found that the companies colluded to fix the level of fuel and security surcharges between 1999 and 2006.

The companies involved were Air Canada, Air France-KLM, British Airways, Cargolux, Cathay Pacific Airways, Japan Airlines, LAN Chile, Martinair, Qantas, SAS and Singapore Airlines.

Among the 11 firms, Air France was fined $197 million and its strategic partner KLM $137 million.

Appeal again?

"Air France-KLM will analyze the new decision, and the advisability of appealing it," the group said in a statement. It added the fines had already been fully covered in its financial accounts since 2010, when the initial EU decision came in.

Another of the companies, Scandinavian Airlines, maintained that its division SAS Cargo had not participated in the global cartel, and that it will appeal the decision.

"We strongly question the European Commission's move to re-impose a decision that has already been annulled once," SAS spokeswoman Marie Wohlfahrt said. "SAS takes the competition rules extremely seriously and does not accept any breaches. We have a clear regulatory framework in place for compliance with competition law."

The current re-imposition of fines applies to all airlines except for Qantas, which did not appeal the 2010 decision.

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Lufhansa Cargo corners niche market

A 12th cartel member, Lufthansa, and its subsidiary, Swiss International Air Lines, were given immunity for notifying the commission of the wrongdoing.

Margrethe Vestager, EU commissioner for competition, said that more than 20 percent of EU imports and 30 percent of EU exports depend on air cargo services.

"Working together in a cartel rather than competing to offer better services to customers does not fly with the commission," Vestager said.

sri/hg (AP, dpa)

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