There goes the 13th month.
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There goes the 13th month.
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Have the EU's accounts been audited yet?
Maybe the CEO and the Director of Cargo, who committed these crimes should do some jail time.
If they wish to take on these positions they should also be liable for their actions.
It would save the shareholders and employees from having to suffer from poor upper level management mistakes.
If they wish to take on these positions they should also be liable for their actions.
It would save the shareholders and employees from having to suffer from poor upper level management mistakes.
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What exactly is price fixing? And why is it bad? Whenever I go into Walmart to buy something, guess what? Their price is fixed. And it's the same price over at Target! Isn't the whole idea of running a business to price things so that you make a profit?
Now if an airline charged less than costs on a route to drive out a new competition, then I can see why that's illegal, but I don't understand the price fixing thing.
Now if an airline charged less than costs on a route to drive out a new competition, then I can see why that's illegal, but I don't understand the price fixing thing.
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The EU is corrupt from top to bottom. Those of us who live under the coming dictatorship that is the EU refer to it as the EUSSR. The EU fining anyone for price fixing is shameful. They fix the price that we in Britain must pay and our spineless Prime Minister bends our collective knee.
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They make more money off these agreements than the fine costs them. The management wont be fired (in fact behind closed doors are probably rewarded) and we should still see 13th month (but wont.)
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just to clarify
@ Pogie
The example you gave is irrelevant. So I assume the question was not rhetoric.
The article talks about price fixing by a cartel of airlines. That means a group of airlines fixed the price (I assume upwards) and that shutters competition.
The client is faced with a "monopoly" that makes him unable to choose, having price as a criteria.
Sometimes there is a company that eventually steps out of the cartel by lowering prices (usually is the company that got the least profit). That leads to a domino effect and that is the end of the cartel.That is why many think that this effect should not be regulated. Eventually the "system" will dissolve the cartel.
On the other hand, buyers of a service-product can also price fix by coordinating forums or boycott actions.
Both practices are affecting in a negative way the law of supply and demand, which is one of the basic foundation of the economic system in the "developed world".
* These days everything about this system in doubt, so lets say I just finished uni and I copy these things from textbooks.
The example you gave is irrelevant. So I assume the question was not rhetoric.
The article talks about price fixing by a cartel of airlines. That means a group of airlines fixed the price (I assume upwards) and that shutters competition.
The client is faced with a "monopoly" that makes him unable to choose, having price as a criteria.
Sometimes there is a company that eventually steps out of the cartel by lowering prices (usually is the company that got the least profit). That leads to a domino effect and that is the end of the cartel.That is why many think that this effect should not be regulated. Eventually the "system" will dissolve the cartel.
On the other hand, buyers of a service-product can also price fix by coordinating forums or boycott actions.
Both practices are affecting in a negative way the law of supply and demand, which is one of the basic foundation of the economic system in the "developed world".
* These days everything about this system in doubt, so lets say I just finished uni and I copy these things from textbooks.
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Perhaps so Hawkeye but who is more corrupt? CX have now been fined in Europe, they paid a fine in the States to avoid a criminal prosecution and I believe they are facing a court case in NZ.
If you had been involved in 3 separate and possibly criminal events would you still be in a job? Yet do we see anyone paying the ultimate price in CX? Not likely.
AAR
If you had been involved in 3 separate and possibly criminal events would you still be in a job? Yet do we see anyone paying the ultimate price in CX? Not likely.
AAR
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Qantas one of 11 airlines fined $1.1 billion for rigging cargo prices
QANTAS is among 11 air cargo carriers fined a total of $1.1 billion by the European Commission for running a freight cartel.
“It is deplorable that so many major airlines coordinated their pricing to the detriment of European businesses and European consumers,” European competition commissioner Joaquin Almunia said today.
Of the 11 airlines, Qantas received one of the lowest fines - $12.3 million. The airline said it was looking at the judgment.
In 2008, Qantas agreed to pay a fine of $20 million under a deal reached with the Australian Competition and Consumer Commission over the same price-fixing cartel.
ACCC chairman Graeme Samuel said today that from from July 2009, the watchdog had viewed serious cartel conduct as criminal, and could push for jail terms of up to 10 years and fines of $10 million or more.
“You'd have to be a really stupid executive to be involved in cartel activity after July last year,” told ABC TV.
In the European cartel, the Air France-KLM group was hit with the biggest fine, $427.3 million, of which $252.2 million was for Air France and $175 million for KLM.
Air France-KLM said it plans to appeal the fine.
British Airways was fined $143.3 million. The other companies fined were Air Canada, Martinair, Cargolux, Cathay Pacific Airways, Japan Airlines, LAN Chile, SAS and Singapore Airlines.
Lufthansa and its subsidiary Swiss International Air Lines escaped a fine under the commission's leniency program for being the first to provide information about the cartel.
The 11 cargo carriers co-ordinated their action on surcharges for fuel and security without discounts over a six-year period, between December 1999 and February 2006, the European Union's competition watchdog said.
LAN Chile was fined $11.3 million, Scandinavia's SAS group $96.3 million, and Luxembourg's Cargolux $109.7 million.
In Asia, Singapore Airlines was fined $102.7 million, Cathay was hit with $78.4 million, and Japan Airlines will pay $49 million.
Air Canada must pay $28.8 million.
Five airlines applied for a reduction in the fine, claiming they were unable to pay it, but the commission said none of them met the conditions.
The commission said it dropped charges against another 11 carriers and one consultancy firm which it did not name.
The fines, totalling $1.1 billion, were slapped on airlines for co-ordinating a cartel that covered flights from, to and within the European Economic Area.
The cartel initially began with contacts between airlines to ensure that worldwide air freight carriers imposed a “flat rate surcharge per kilo for all shipments,” the commission said.
The co-operation expanded with the introduction of a security surcharge. The companies refused to pay a commission on such surcharges to their clients, the regulator said.
“By refusing to pay a commission, the airlines ensured that surcharges did not become subject to competition through the granting of discounts to customers,” the commission said.
SAS also said it would appeal the fine.
“We adamantly maintain that these isolated incidents do not mean that SAS Cargo has been involved in a global cartel,” the airline's chief legal officer, Mats Loennkvist, said in a statement.
“We are highly disappointed and strongly contest the considerable level of the fines, which we believe to be disproportionate to SAS Cargo's actions.”
- UPDATE
- From: AFP
- November 10, 2010 10:07AM
QANTAS is among 11 air cargo carriers fined a total of $1.1 billion by the European Commission for running a freight cartel.
“It is deplorable that so many major airlines coordinated their pricing to the detriment of European businesses and European consumers,” European competition commissioner Joaquin Almunia said today.
Of the 11 airlines, Qantas received one of the lowest fines - $12.3 million. The airline said it was looking at the judgment.
In 2008, Qantas agreed to pay a fine of $20 million under a deal reached with the Australian Competition and Consumer Commission over the same price-fixing cartel.
ACCC chairman Graeme Samuel said today that from from July 2009, the watchdog had viewed serious cartel conduct as criminal, and could push for jail terms of up to 10 years and fines of $10 million or more.
“You'd have to be a really stupid executive to be involved in cartel activity after July last year,” told ABC TV.
In the European cartel, the Air France-KLM group was hit with the biggest fine, $427.3 million, of which $252.2 million was for Air France and $175 million for KLM.
Air France-KLM said it plans to appeal the fine.
British Airways was fined $143.3 million. The other companies fined were Air Canada, Martinair, Cargolux, Cathay Pacific Airways, Japan Airlines, LAN Chile, SAS and Singapore Airlines.
Lufthansa and its subsidiary Swiss International Air Lines escaped a fine under the commission's leniency program for being the first to provide information about the cartel.
The 11 cargo carriers co-ordinated their action on surcharges for fuel and security without discounts over a six-year period, between December 1999 and February 2006, the European Union's competition watchdog said.
LAN Chile was fined $11.3 million, Scandinavia's SAS group $96.3 million, and Luxembourg's Cargolux $109.7 million.
In Asia, Singapore Airlines was fined $102.7 million, Cathay was hit with $78.4 million, and Japan Airlines will pay $49 million.
Air Canada must pay $28.8 million.
Five airlines applied for a reduction in the fine, claiming they were unable to pay it, but the commission said none of them met the conditions.
The commission said it dropped charges against another 11 carriers and one consultancy firm which it did not name.
The fines, totalling $1.1 billion, were slapped on airlines for co-ordinating a cartel that covered flights from, to and within the European Economic Area.
The cartel initially began with contacts between airlines to ensure that worldwide air freight carriers imposed a “flat rate surcharge per kilo for all shipments,” the commission said.
The co-operation expanded with the introduction of a security surcharge. The companies refused to pay a commission on such surcharges to their clients, the regulator said.
“By refusing to pay a commission, the airlines ensured that surcharges did not become subject to competition through the granting of discounts to customers,” the commission said.
SAS also said it would appeal the fine.
“We adamantly maintain that these isolated incidents do not mean that SAS Cargo has been involved in a global cartel,” the airline's chief legal officer, Mats Loennkvist, said in a statement.
“We are highly disappointed and strongly contest the considerable level of the fines, which we believe to be disproportionate to SAS Cargo's actions.”
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from today's intracx
Dear Colleagues,
I have to inform you of a decision announced yesterday (9 November) by the European Commission (EC) in relation to our airline.
The EC announced that as a result of its 2006 investigation into surcharge pricing practices in the airfreight business it has determined that Cathay Pacific and a number of other international air cargo carriers agreed on cargo surcharge levels between May 2004 and February 2006, and that such agreements infringed European competition law.
The EC has assessed fines totalling almost 800 million euros against these airlines. For Cathay Pacific, the EC has assessed a fine of 57,120,000 euros (equivalent to HK$618 million). We are now in the process of reviewing the EC’s decision and will evaluate our options with our legal advisers.
I would like to stress that we have always endeavoured to comply fully with the legal requirements in every jurisdiction in which we operate, and that we are firm in our support of full and fair competition among all air carriers. We also believe that our activities were in full compliance with Hong Kong law and legal requirements.
Our commitment to full and fair competition includes setting up the Competition Compliance Office (CCO), which is part of our Corporate Risk Management Department. The CCO manages our competition compliance programme and provides the training and support necessary for our airline to comply with both Cathay Pacific’s Antitrust Policy and antitrust and competition laws around the world.
Tony Tyler
Chief Executive
I have to inform you of a decision announced yesterday (9 November) by the European Commission (EC) in relation to our airline.
The EC announced that as a result of its 2006 investigation into surcharge pricing practices in the airfreight business it has determined that Cathay Pacific and a number of other international air cargo carriers agreed on cargo surcharge levels between May 2004 and February 2006, and that such agreements infringed European competition law.
The EC has assessed fines totalling almost 800 million euros against these airlines. For Cathay Pacific, the EC has assessed a fine of 57,120,000 euros (equivalent to HK$618 million). We are now in the process of reviewing the EC’s decision and will evaluate our options with our legal advisers.
I would like to stress that we have always endeavoured to comply fully with the legal requirements in every jurisdiction in which we operate, and that we are firm in our support of full and fair competition among all air carriers. We also believe that our activities were in full compliance with Hong Kong law and legal requirements.
Our commitment to full and fair competition includes setting up the Competition Compliance Office (CCO), which is part of our Corporate Risk Management Department. The CCO manages our competition compliance programme and provides the training and support necessary for our airline to comply with both Cathay Pacific’s Antitrust Policy and antitrust and competition laws around the world.
Tony Tyler
Chief Executive
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This had been provisioned for a while ago and not an excuse for cutting any benefits/bonuses , nevertheless i'm quite confident Darth Arendt has a whole truck load of new and never heard of aces up his financial sleeves.
I sense a strong disturbance in the force
I sense a strong disturbance in the force
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We are now in the process of reviewing the EC’s decision and will evaluate our options with our legal advisers.
How much of a payrise for every employee would HKD618 Mil have been good for?
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Fine is a drop in the bucket compared to what they made. Simply a cost of doing business. The boys upstairs probably had a very expensive glass of 18 year old neat when the ruling came down. Patting each other on the back for a job well done.
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“You'd have to be a really stupid executive to be involved in cartel activity after July last year,” told ABC TV.
The slap on the wrist that said executive would receive would be insignificant compared to the bonuses received.
Compare the slap on the wrist to what's received for major crime in Australia. Suspended sentences, non custodial sentences, non-parole and good behaviour discounts that end up far less than half the original sentence.
You're kidding Graeme?
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Getting paid off!
I just saved the company 500kg kg fuel by taking a direct route today. Only 272,000 more sectors and the fine will be paid off. Now go out and spend your 13th month today!