Seems JL is in more hot water with the Korean competition commission for colluding on freight surcharges! But is OK, the taxpayer will pay the fine!


Seoul panel sets $140m penalty for fixing cargo rates.

SEOUL: Korean Air Lines, the world's largest international air cargo carrier, Japan Airlines and Singapore Airlines were among 19 airlines fined after a South Korean antitrust agency said they fixed cargo shipment rates.

The carriers will be fined a combined 120 billion won (S$140 million), the Fair Trade Commission of South Korea said in an e-mail statement on Thursday in Seoul. Scandinavian Airlines and Air India were given warnings without being penalised.

Singapore Airlines (SIA) Cargo, a subsidiary of the airline, said it is 'very disappointed' by the South Korean decision and it would seriously consider an appeal after seeing the full ruling.

'The Commission's full reasoning has not yet been received,' SIA Cargo said in a statement to the Singapore Exchange yesterday. It added that the company would 'study the decision closely with a serious view towards mounting an appeal'.

The Fair Trade Commission also confirmed yesterday that it had granted 'leniency' to Korean Air, because the country's main flag carrier had voluntarily reported the price-fixing. The Commission gave no figures, but Korean Air said its fine has been cut to 22.2 billion won from the 48.7 billion won announced on Thursday.

Asiana Airlines, South Korea's second flag carrier, was fined 20.7 billion won. Also among those penalised were Lufthansa and Air France.

Hong Kong flag carrier Cathay Pacific said its fine was 4.1 billion won. It said it would review the Korean decision and 'explore the options available'.

The Fair Trade Commission said on Thursday the 21 airlines from 16 countries had conspired to introduce fuel surcharges for freight cargoes, or continued to raise them over the past seven years.

The Commission said the airlines tried to introduce fuel surcharges for all carriers through the International Air Transport Association in the late 1990s, but were not allowed to do so. They then resorted to unfair practices to introduce and raise surcharges.

The Commission estimated the practices cost exporters 6.7 trillion won by making them pay excessive freight charges.

'We expect the latest move will help eradicate the age-old price-rigging practices in the air freight service sector, helping protect local consumers and enhance the overall export competitiveness of industry here,' it said in a statement.

'We also expect the tough punishment will help decrease price-fixing attempts by foreign service providers targeting our market in the future.' The move is the result of an investigation launched in 2005. The probe was conducted in cooperation with antitrust watchdogs in the United States and the European Union.

BLOOMBERG, AGENCE FRANCE-PRESSE