Aviation News

September 27, 2010

China Airlines to Plead Guilty, Pay $40 Million Fine in U.S. Price Fixing

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By: BNO News
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Air China 747-400 (B-18025) on approach to LAX. (Photo by Phil Derner, Jr.)
Air China 747-400 (B-18025) on approach to LAX. (Photo by Phil Derner, Jr.)

Air China 747-400 (B-18025) on approach to LAX. (Photo by Phil Derner, Jr.)

Taiwan-based China Airlines agreed to plead guilty and to pay a $40 million criminal fine for its role in a conspiracy to fix prices in the air transportation industry, the U.S. Department of Justice announced on Monday.

According to a one-count felony charge filed on Monday in U.S. District Court for the District of Columbia, the airline engaged in a conspiracy to fix the cargo rates charged to customers for international air cargo shipments to and from the U.S. from at least as early as January 2001, until at least Feb. 14, 2006.

The company was charged with price fixing in violation of the Sherman Act, which carries a maximum fine of $100 million for corporations.

The Justice Department said that including Monday’s charge, as a result of this investigation, a total of 18 airlines and eight executives have been charged in the 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.

The Justice Department said airlines caught up in the probe include British Airways, Korean Air Lines, Qantas, Japan Airlines, Martinair, Cathay Pacific, SAS Cargo Group, Air France, KLM Royal Dutch Airlines, EL AL, LAN Cargo, Aerolinhas Brasileiras S.A., Cargolux Airlines, Nippon Cargo, Northwest Airlines and Asiana.

Additionally, on Sept. 2, 2010, Polar Air Cargo was charged in this investigation and is scheduled to enter a guilty plea and be sentenced on Oct. 15, the Justice Department added.

Airline executives who have pleaded guilty are Bruce McCaffrey of Qantas, Keith Packer of British Airways, Franciscus Johannes de Jong of Martinair and Timothy Pfeil of SAS Cargo.

Jan Lillieborg, former vice president of global sales for SAS Cargo; Joo Ahn Kang, former president of Asiana; Chung Sik Kwak, former vice president of the Americas region of Asiana; and Maria Christina “Meta” Ullings, senior vice president of Cargo Sales and Marketing of Martinair Holland N.V., were also indicted. Trial dates have yet to be scheduled for these individuals.