China Airlines Ltd. has 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 Department of Justice announced.
According to a one-count felony charge filed today in U.S. District Court for the District of Columbia, Taiwan-based China Airlines engaged in a conspiracy to fix the cargo rates charged to customers for international air cargo shipments to and from the United States from at least as early as January 2001, until at least Feb. 14, 2006.
The department said that China Airlines joined an ongoing conspiracy among cargo carriers that began at least as early as Jan.1, 2000. Under the plea agreement, which is subject to court approval, China Airlines has agreed to cooperate with the departments ongoing antitrust investigation.
Air cargo carriers transport a variety of cargo shipments, such as heavy equipment, perishable commodities, and consumer goods, on scheduled international flights.
According to the charge, China Airlines carried out the conspiracy by agreeing during meetings and other communications on certain components of the cargo rates to be charged for shipments on certain routes to and from the United States and by levying cargo rates in accordance with the agreements reached. As part of the conspiracy, China Airlines monitored and enforced adherence to the agreed-upon cargo rates.
China Airlines is charged with price fixing in violation of the Sherman Act, which carries a maximum fine of $100 million for corporations. 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.
Including the current charge, as a result of this investigation, a total of 18 airlines and eight executives have been charged in the Justice Departments 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 the remaining four executives.
The airlines that have pleaded guilty, or have agreed to plead guilty, as a result of the departments ongoing 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, Socit 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.
Additionally, on Sept. 2, 2010, Polar Air Cargo LLC was charged in this investigation and is scheduled to enter a guilty plea and be sentenced on Oct. 15, 2010.