23 August 2010 by

Airlines to be prosecuted for price fixing

The Competition Commission recently referred a complaint against British Airways plc, South African Airways Cargo, Air France Cargo, KLM Cargo, Alitalia Cargo, Cargolux International S.A., Singapore Airlines, Martinair Cargo and Lufthansa Cargo to the Tribunal for adjudication. The allegation against the respondents is that they fixed fuel surcharges on cargo flown into and out of South Africa. 

In addition, Lufthansa, Cargolux, Air France and KLM allegedly fixed cargo rates on certain routes. The Commission initiated this investigation on 27 March 2006 subsequent to a leniency application by Lufthansa, inter alia, in South Africa, the United States of America (USA), Europe, Korea, Canada and Australia. In South Africa, Lufthansa was granted conditional immunity from prosecution provided it co-operated with the Commission in its investigation and prosecution. The Commission has requested the Tribunal to impose a penalty of 10% of annual turnover on each of the remaining airlines. Investigations in the USA are ongoing. In Europe, hearings have been completed and the European Commission is yet to hand down its decision. Some of the airlines in Korea, Canada and Australia have been fined.

Chris Charter, Director, Competition
Scarlate Nkiwane, Associate, Competition

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