Hong Kong-based Cathay Pacific and four other airlines have been fined a total US$504 million for conspiring to fix air cargo prices.
The US Department of Justice (DOJ) said Cathay Pacific Airways, Air France, KLM Royal Dutch Airlines, Martinair and SAS Cargo held meetings between 2001 and 2006 aimed at suppressing and eliminating competition by fixing the cargo rates charged to customers for international air shipments.
"This was something that was a very concerted long-term practice," said Kevin O'Connor, the DOJ's associate attorney general.
The companies, which the DOJ said are co-operating with its ongoing investigation, are charged with price fixing in violation of the Sherman Act.
"The air cargo conspirators artificially raised the prices paid to ship billions of dollars of goods," said Scott Hammond, deputy assistant attorney general in charge of criminal enforcement for the DOJ's anti-trust division. "American businesses and consumers ended up picking up the tab."
The actions affected billions in consumer goods including produce, clothing, electronics and medicines, potentially adding more than 10 percednt to the costs of the goods, the DOJ said.
Air France-KLM, which owns Air France and KLM Royal Dutch Airlines, was fined the highest - $350 million, which if imposed by a court would become the second-highest figure ever levied in a criminal antitrust prosecution.
Cathay Pacific was fined $60 million, Martinair $42 million and SAS Cargo Group $52 million.
Earlier, British Airways, Korean Air Lines, Qantas Airways and Japan Airlines pleaded guilty to similar charges and were fined by the DOJ.
Cathay said the fines, which will be recorded in its first-half results, would bring to an end the DOJ investigation of its cargo operations.
"The company has carefully considered all applicable factors and concluded that entering into this agreement at this time presents the best resolution to the investigation," Cathay Pacific Chief Executive Tony Tyler said in a statement.
Cathay Pacific said its staff has at all times complied with Hong Kong laws. "Unfortunately, in this instance, it transpired that some of our actions relating to shipments from Hong Kong to the United States were in conflict with United States anti-trust laws, and we very much regret this," said Cathay Pacific chief executive Tony Tyler.
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