JAL hit by US110 million cargo cartel fine

JAPAN AIR LINES has become the fourth airline in the worldwide air cargo cartel conspiracy to plead guilty to price-fixing. After entering a plea bargain in the US, on 16 April it was hit with a US$110 million criminal fine for fixing rates on international air cargo shipments.

In a statement, the company said that it had agreed “to plead guilty concerning certain alleged violations of the antitrust laws in the US/trans-Pacific international air cargo business”, and to pay the fine.

JAL also stated that since the investigation was launched with a series of dawn raids on airline premises around the world on 14 February 2006, it has cooperated fully with the US Department of Justice (DoJ).

According to the DoJ, JAL “engaged in conspiracy” in the US and other countries to cut out competition, by fixing rates in a scheme that lasted from April 2001 to February 2006. The DoJ added that during that time JAL was the dominant carrier between the US and Japan, receiving almost two million dollars in revenues.

The Japan Airlines Corporation, announced last November, had set aside a reserve of approximately 11.5 billion yen for a potential fine.

“The company will not tolerate any behaviour that contravenes such laws and regulations. The JAL Group will determinedly continue to expand and reinforce its current antitrust compliance programme,” the statement concluded.

The JAL plea deal comes after the DoJ reached similar agreements with three other carriers last year. British Airways and Korean Air each agreed to pay $300 million fines and Qantas $61 million.

Furthermore, JAL will be required to cooperate fully with the ongoing investigation. The US DoJ will be hoping that this will uncover further evidence against some 26 other airlines that are believed to be under current investigation by US, EU or other national justice bodies for price-fixing activities.

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