Singapore, 31 May (Argus) — South Korea's antitrust authority has slapped a record 120bn won ($98.1mn) fine on 19 air cargo carriers for collusion over jet fuel surcharges.
Following a five-year investigation, the country's fair trade commission (FTC) concluded that the 19 airlines effectively operated as a cartel and unfairly imposed surcharges on routes involving South Korea that totalled W6.7 trillion from 1999 to 2007.
Korean Air received the heftiest fine at W22.1bn, while fellow South Korean carrier Asiana Airlines and Germany's Lufthansa were fined W20.6bn and W12.1bn respectively. Other airlines penalised included Air France-KLM, Hong Kong-based Cathay Pacific Airways, Japan Airlines and Singapore Airlines Cargo. Scandinavian Airlines and Air India were issued with warnings but were spared fines.
Singapore Airlines Cargo said in a filing to the Singapore Exchange that it was very disappointed with the decision and might consider an appeal pending full notification from FTC.
The alleged cartel, involving airlines from 16 countries, was the biggest price-fixing case FTC had handled. The previous record fine of W105bn for price fixing was handed out to 10 domestic petrochemical companies.
The airline industry has come under closer scrutiny from competition watchdogs in recent years as surging jet fuel prices raised operating costs. Jet fuel prices have risen from around $16/bl in 1999 to a high of around $180/bl in 2008.
Indonesia's business competition supervisory commission last month fined nine airline companies 700bn rupiah ($76.3mn) for fixing fuel surcharges from 2006 to 2009. The Australian Competition and Consumer Commission earlier this month filed similar complaints against Air New Zealand and Japan Airlines in a long-running investigation that had already seen 13 other carriers charged.
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