The company agreed to pay a USD$15.7 million fine after a settlement with the U.S. District Court for the District of Columbia
El Al Israel Airlines agreed to plead guilty to conspiring to fix air freight prices and will pay $15.7 million, the US Justice Department said last week. The plea agreements are subject to approval by the U.S. District Court for the District of Columbia.
The settlement and related litigation stem from an ongoing international investigation into a conspiracy to fix prices for air cargo that has allegedly affected billions of dollars of consumer and other goods, including produce, clothing, electronics and medicines.
The most recent penalties were announced Jan. 22 by the Department of Justice. LAN Cargo S.A. of Chile and Aerolinhas Brasileiras S.A., a Brazilian carrier substantially owned by LAN Cargo, have been fined $109 million, while EL AL Israel Airlines Ltd. has agreed to a fine of $15.7 million.
U.S authorities are investigating more than 30 international airlines operating in the air freight business. Eight other airlines previously reached similar agreements with DOJ: British Airways, Korean Air, Air France-KLM, Japan Airlines, Qantas, Cathay Pacific, SAS and Martinair/Tampa. DOJ has collected a total of $1.275 billion in fines.
According to the charges filed last week in the U.S. District Court for the District of Columbia, each airline engaged in a conspiracy in the United States and elsewhere to eliminate competition by fixing the cargo rates charged to customers for international air shipments, including to and from the United States.
EL AL is charged with engaging in the conspiracy from in or about January 2003 until at least Feb. 14, 2006.
Scott D. Hammond, Acting Assistant Attorney General in charge of the Department's Antitrust Division said "American consumers were forced to pay higher prices on the goods they buy every day as a result of the inflated and collusive shipping rates charged by these companies”.
EL AL is charged with carrying out the price-fixing conspiracy with co-conspirators by:
Participating in meetings, conversations and communications in the United States and elsewhere to discuss the cargo rates to be charged on certain routes to and from the United States;
Agreeing, during those meetings, conversations and communications on certain components of the cargo rates to charge for shipments on certain routes to and from the United States;
Levying cargo rates in the United States and elsewhere in accordance with the agreements reached; andEngaging in meetings, conversations and communications in the United States and elsewhere for the purpose of monitoring and enforcing adherence to the agreed-upon cargo rates