Air France-KLM and BA Biggest Winners as EU Fines Thrown Out
Air France-KLM Group and British Airways were the biggest winners among 11 carriers that won their court battle against European Union antitrust fines adding up to about €790.5 million.
In a blow for the European Commission, judges at the EU’s General Court in Luxembourg wiped out penalties for colluding on air-cargo fuel and security surcharges.
“For cartel decisions to be overturned is virtually unheard of,” said Kim Dietzel, a lawyer at Herbert Smith Freehills in London. “It feels like they’re trying to come down hard on the commission.”
Air France-KLM’s combined fine of about €310 million shouldn’t be allowed to stand along with IAG’s BA’s 104 million penalty, judges said. Other carriers getting a boost include SAS AB, which saw a fine of €70.2 million overturned, and Singapore Airlines, which was originally ordered to pay €74.8 million five years ago.
"There is a contradiction” and “inconsistencies” in the EU antitrust regulator’s 2010 decision that are difficult to reconcile, the court said in a ruling cataloging blunders in the way the case was handled.
Air France-KLM shares gained one per cent in Paris trading, while IAG advanced 0.3 per cent in London. SAS surged in Stockholm trading ahead of the ruling, as the Nordic region’s largest airline posted a return to full-year profit. The shares jumped 6.1 per cent on the day.
The only decision still standing is an 8.88 million fine for Qantas Airways. The Australian carrier, the only one not to file a challenge, may bear the brunt of damages claims as the sole company still liable for this infringement.
The Sydney-based carrier didn’t immediately respond to an e-mail seeking comment outside regular office hours.
The commission said the companies ran a global cartel affecting cargo services in Europe by coordinating their actions on surcharges for fuel and security without discounts over six years. The EU fines came three years after regulators sent complaints to 26 airlines, after coordinated antitrust raids worldwide that led to jail terms for some executives, fines and settlements.
The Brussels-based commission said it “will carefully examine the judgments and their implications as well as potential next steps.”
The competition regulator will most likely appeal the court’s rulings to EU Court of Justice, according to Dietzel.
“The court statement is really damning. It’s egg on their face,” she said. The commission has “got nothing to lose.”
Air France-KLM said in a statement that the “fines have been fully covered in the financial accounts since 2010.” At 30 September “the corresponding provisions amount to 380 million euros, including interest.”
Japan Airlines, Cathay Pacific Airways and Cargolux Airlines International also won their appeals, as did Singapore Airlines, Air Canada and South American carrier Latam Airlines Group.
Luxembourg-based Cargolux said in an e-mailed statement it “will conduct a detailed analysis of the court’s decision.”
News by Bloomberg, edited by Hospitality Ireland