SQ and CX investigated by EU for anti-competitive behaviour
Friday, 28 December 2007: Both Singapore Airlines and Cathay Pacific are looking at the possibility of being slugged with fines for price-fixing, as the European Union gives notice to several major airlines around the world to explain their roles in the ‘cartel’.
Taking place globally, this investigation has been continuing across a range of countries and a range of airlines from as early as the first half of 2006.
Airlines such as Qantas, Lufthansa, Singapore Airlines, Cathay Pacific, Korean Air and British Airways have been accused of price-fixing fuel surcharges post-9/11 due to what they claimed were high security charges of shipping freight due to higher security concerns, and ‘war risk’ surcharges due to higher insurance.
The United States Department of Justice investigation into the matter included as many as 30 airlines.
Qantas had in November pleaded guilty to charges from the US Department of Justice for fixing cargo fuel surcharges, garnering a plea bargain of USD61 million in fines.
And it’s not the only carrier the EU is investigating. Similar missives have been confirmed in offices including Air France-KLM, Scandinavian Airlines System (SAS), Air Canada, Singapore Airlines and Cathay Pacific.
Most of the carriers are looking at fines from multiple countries as it is believed the price-fixing occurred on fares around the world.
For example British Airways has already been hit twice this year, once from the US Department of Justice for USD300 million, and again by its own British Office of Fair Trading for GBP121.5 million for fixing both passenger and cargo surcharges.
Qantas on the other hand is currently also being investigated by consumer watchdogs in Australia and New Zealand and liable to face further fines if found guilty.
EU investigative officials did stress that the missives, or ‘Statement of Objection’ notices, did not equate with definitive action, and that final outcomes had not yet been reached.