Wall Street Journal (11.8.10)

EU to Fine Airlines for Cargo Cartel

BRUSSELS—The European Commission is set to fine several airlines Tuesday for an alleged global cartel in freight transport, ending a four-year investigation, two people familiar with the case said Monday.

The commission, the European Union's executive arm, could fine the airlines—among them Europe's largest, such as Air France-KLM and British Airways PLC—hundreds of millions of euros for colluding in setting surcharges for their cargo operations. Deutsche Lufthansa AG isn't expected to be fined because it acted as whistle-blower in the case, which has focused mainly on fuel surcharges.

The commission's fines can be up to 30% of the companies' revenue from the specific activity targeted in the investigation, to which some further sums for aggravating circumstances can be added for each year the cartel operated. However, given the recent economic downturn and the big hit airlines have taken from it, fines might be lower than otherwise expected.

The commission's probe—which started in 2006 with unannounced raids at the companies' headquarters—initially targeted more than 20 carriers. More than 10 airlines are likely to be fined, the people familiar with the case said.

The commission declined to confirm the announcement of the fines. Companies have two months to appeal to the European Court of Justice after the commission makes a decision.