October 16, 2014

Asiana offers $55m and joins a growing list of airlines settling air cargo antitrust litigation

Whether it is the settlement figures or the number of airlines apparently involved in this price-fixing scandal, both figures are shocking in their size. To summarize; between January 1st 2000 and September 11th 2006, it is alleged that Asiana, along with over two dozen other airlines, conspired to fix air freight charges. In 2006, 90 lawsuits were brought against these airlines, and since then, agreements have been reached with a good number of the accused. According to the DOJ, those accused used meetings and various other forms of communication to establish cargo rates the airlines could charge for numerous routes. These airlines then subsequently adopted the agreed-upon rates and continued to hold meetings in the U.S. and a number of countries, to reinforce the price-fixing scheme.
While direct and indirect purchasers initially brought suits, the Second Circuit upheld the dismissal of indirect purchaser plaintiffs in 2012, indicating that federal aviation law pre-empted price-fixing claims made against foreign carriers based on the State’s antitrust statutes. The class action suit has been brought by direct purchasers of air freight services, in other words those predominantly involved in offering freight-forwarding services. This settlement by Asiana, the Seoul, South Korean-based airline, is dwarfed somewhat by the earlier-this-year settlements of $90m from China Airlines Ltd, $115m from Korean Airlines, $92.4m by Singapore Airlines and also $65m from Cathay Pacific, agreed back in January. To date over $800m has been agreed in settlement figures while, according to Reuters, six defendants in the class action have not agreed to settle: Air China Ltd, Air India, Air New Zealand Ltd, Atlas Air Worldwide Holdings Inc, Eva Airways Corp and Nippon Cargo Airlines Ltd.



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