17th Airline Pleads Guilty To Price Fixing On Air Cargo Shipments

A seventeenth airline has been charged in the U.S. Justice Department’s ongoing investigation into price fixing in the air transportation industry. To date, more than $1.6 billion in criminal fines have been imposed and four executives have been sentenced to serve prison time. Charges are pending against three other executives.

The latest development: Polar Air Cargo LLC has agreed to plead guilty and to pay a $17.4 million criminal fine for its role in a conspiracy to fix prices in the air transportation industry.
 
According to a one count felony charge, Polar Air Cargo's co-conspirators engaged in a conspiracy to fix the cargo rates charged to certain customers for international air cargo shipments between the United States and Australia from at least as early as Jan. 1, 2000, and continuing until at least Feb. 14, 2006. Polar Air Cargo, an American airline based in Long Beach, CA, joined and participated in the conspiracy from at least as early as Jan. 1, 2000, until April 30, 2003. Under the plea agreement, which is subject to court approval, Polar Air Cargo has agreed to cooperate with the department's ongoing antitrust investigation.
 
According to the charge, Polar Air Cargo carried out the conspiracy by agreeing during meetings, conversations and communications on certain components of cargo rates for shipments between the United States and Australia and by levying cargo rates in accordance with the agreements reached. As a part of the conspiracy, Polar Air Cargo monitored and enforced adherence to the agreed-upon rates.
 
Polar Air Cargo is charged with price fixing in violation of the Sherman Act, which carries a maximum fine of $10 million for corporations for offenses committed before June 22, 2004. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
 
The airlines that have pleaded guilty, as a result of the department's investigation into the air transportation industry are: British Airways Plc, Korean Air Lines Co. Ltd., Qantas Airways Limited, Japan Airlines International Co. Ltd., Martinair Holland N.V., Cathay Pacific Airways Limited, SAS Cargo Group A/S, Société Air France, Koninklijke Luchtvaart Maatschappij N.V. (KLM Royal Dutch Airlines), EL AL Israel Airlines Ltd., LAN Cargo S.A., Aerolinhas Brasileiras S.A., Cargolux Airlines International S.A., Nippon Cargo Airlines Co. Ltd., Northwest Airlines LLC and Asiana Airlines Inc. Airline executives who have pleaded guilty as a result of the investigation are Bruce McCaffrey of Qantas, Keith Packer of British Airways, Franciscus Johannes de Jong of Martinair and Timothy Pfeil of SAS. On Aug. 12, 2009, Jan Lillieborg, a citizen and resident of Sweden and former vice president of global sales for SAS Cargo, was indicted for participating in a conspiracy to suppress and eliminate competition by allocating customers and coordinating surcharge increases for international air shipments to and from the United States. On Aug. 26, 2010, Joo Ahn Kang, former president of Asiana, and Chung Sik Kwak, former vice president of the Americas region of Asiana, both citizens and residents of the Republic of Korea, were indicted for participating in a conspiracy to suppress and eliminate competition by fixing passenger airfares for travel between the United States and Korea.