Saturday, July 31, 2010

Say it loud but not so proud -- no hush money here

No hush hush settlement here. This criminal fine is a small part of a total $1.6 BILLION penalty being paid by some of the big names in the global airline industry.

Northwest to Pay $38 Million Fine
Northwest Airlines has agreed to plead guilty to fixing prices on air-cargo shipments and will pay a $38 million criminal fine, the Justice Department announced Friday.

The department said Northwest Airlines Cargo engaged in a conspiracy to fix prices for shipments on routes between the U.S. and Japan from at least July 2004 to at least February 2006.

Northwest is now part of Delta Air Lines Inc.

Prosecutors said Northwest and other air-cargo shippers held meetings and conversations in the U.S. and elsewhere in which they agreed on shipping rates, in violation of federal antitrust law. The shippers also monitored and enforced each other's adherence to the price-fixing agreements, prosecutors said.

The Justice Department said 16 airlines have now pleaded guilty or agreed to plead guilty to fixing prices on air cargo, with criminal fines totaling more than $1.6 billion.

Air France-KLM paid a $350 million criminal fine in 2008, while British Airways PLC and Korean Air Lines each paid a $300 million fine in 2007.

Elsewhere, however, the article notes the hush money game continues.
In a related development this week, the parent of American Airlines agreed to pay $5 million to settle a U.S. class-action lawsuit brought by shippers who say they were overcharged by the airlines.

AMR Corp. admitted no wrongdoing and said it settled to avoid the cost of a U.S. trial.

What happens with all that money? Where does it go?

That was one of the first questions Guambat posed when he began this blog back in 2005. And he's never been satisfied that he really has a clue.

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