Airlines Face Big EU Air Cargo Cartel Fines

The European Union is expected to fine several major airlines hundreds of millions of dollars this week for fixing international freight rates.

The European Commission, the EU's executive, could announce the fines as early as Nov. 10, closing a four year investigation that began with raids on carriers' offices on both sides of the Atlantic.

Major airlines facing EU penalties have already paid over $1.6 billion in fines to U.S. authorities for their role in a global air cargo cartel that operated from 2001 to early 2006.

By The Numbers: Air Freight Price Index.

The Commission can fine companies up to 10 percent of their annual global revenue if it finds them guilty of price fixing but it rarely hands down the maximum penalty.

Air France KLM and British Airways, which were fined $350 million and $300 million respectively in the U.S., are among airlines facing substantial fines from the EU.

Cathay Pacific, Japan Airlines, Alitalia and All Nippon Airways have confirmed they have been investigated.

Lufthansa, Europe's largest cargo carrier, is not facing a fine as it informed the Commission about the cartel's activities.

The Commission's decision will have an impact on several pending legal actions by shippers seeking damages they suffered due to the cartel's activities.

Several hundred European shippers, led by Swedish telecoms group Ericsson and Dutch electronics giant Philips, are suing Air France-KLM and its Martinair subsidiary for $560 million.

-- Contact Bruce Barnard at brucebarnard47@hotmail.com.