China Airlines Pleads Guilty to Price Fixing

A Taiwan-based airline has pleaded guilty to participating in a conspiracy to fix prices in the air transportation industry, according to a felony charge filed in U.S. District Court for the District of Columbia.

China Airlines Ltd. has agreed to pay a $40 million criminal fine for its role in the price-fixing conspiracy, which affected international air cargo shipments to and from the United States from January 2001 to February 14, 2006.

The airline joined an ongoing conspiracy among cargo carriers that began at least as early as January 1, 2000, the charge alleges. As part of the conspiracy, China Airlines agreed to fix cargo rates for shipments on certain routes and monitored adherence to those rates.

Under the plea agreement, China Airlines has agreed to cooperate with the ongoing antitrust investigation. This is the latest development in the Justice Department’s investigation into price fixing in the air transportation industry, which has resulted in charges against 18 airlines and eight executives.

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.

China Airlines is one of several airlines that have pleaded guilty or agreed to plead guilty as a result of the investigation. Others include 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, Société 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, Asiana Airlines Inc., and Polar Air Cargo LLC.

The maximum fine for China Airlines’ violation of the Sherman Act is $100 million, although the 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.

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