BA is winner, Air France-KLM loser in EU cargo fines fight

British Airways won a nearly 20% cut in its 104 million-euro ($116 million) European Union fine for plotting to fix cargo fees with rivals including Air France-KLM as EU judges largely backed a crackdown on a cartel that regulators dubbed “deplorable.” 

While the EU’s General Court in Luxembourg partially faulted the European Commission’s findings in the BA case and a handful of others, it dismissed the appeals of Air France-KLM units over their fines totaling 325.5 million euros. 

Wednesday’s rulings follow the EU authority’s decision to punish the airlines for a global scheme, where cargo carriers plotted to fix the level of fuel and security surcharges over six years until early 2006. The EU cases triggered a spate of lawsuits from victims seeking compensation for elevated freight costs and Wednesday’s judgments are unlikely to stymie those claims.

Despite some cuts in fines, the judgments are mostly a victory for the EU’s antitrust regulator after initial penalties levied in 2010 were struck down by the bloc’s judges on procedural grounds. The commission went back to the drawing board and re-adopted its fines in 2017, sparking a new round of appeals by the companies targeted.

Air France-KLM said Wednesday it “will immediately analyse” the latest decision “in view of an appeal” before the bloc’s top court. 

It said provisions of 350.6 million euros including interest were made in the accounts of Dec. 31, 2021.

While IAG SA’s BA’s penalty was trimmed to 84.5 million euros, the biggest percentage cut was about 73% for Latam Airlines Group SA. It had a reduction to 2.2 million euros from 8.2 million euros. Meanwhile Cathay Pacific Airways Ltd, Japan Airlines Co. and Air Canada all enjoyed cuts.

Cargolux Airlines International SA and Singapore Airlines Ltd. lost their challenges to fines of respectively 79.9 million euros and 74.8 million euros. SAS AB’s overall penalty was also largely upheld by the court. 

The original 2010 decision also included Qantas, which never appealed its 8.8 million euro penalty. 

Deutsche Lufthansa AG was never fined because it originally informed the EU about the suspect activity. But the firm on Wednesday lost a challenge over its liability.