Cartel Members, Beware

Airlines are chockablock with good news these days. If they're not losing billions of dollars for their investors, they are shrinking seating space and reducing inflight services for their passengers.

And, it turns out, a global cartel of airlines has been busy fixing prices on shipping consumer goods, commodities, and equipment.

Japan Airlines today became the fourth cargo carrier to admit being involved with the cartel — which the Justice Department is still investigating, in an ominous note for any American carriers that might have been involved.

JAL agreed to pay a $110 million criminal fine to resolve the matter, the Justice Department said. The carrier earned almost $2 billion from its trans-Pacific cargo flights during the nearly six years the cartel operated, prosecutors said.

The carrier said it would admit having participated in a scheme to fix rates on cargo shipped to and from the United States from April 2000 to February 2006, according to the department's filing in federal district court in Washington, D.C.

"This price fixing conspiracy inflicted a heavy toll on American businesses and consumers," said Thomas O. Barnett, the Justice Department's antitrust head, said in a statement.

British Airways pleaded guilty last August to conspiring to fix cargo rates for international air shipments, and agreed to pay a $400 million fine. That plea included charges that it set passenger fuel surcharges for long-haul international air transportation.

The same day, Korean Air Lines pleaded guilty and was sentenced to pay a $300 million fine for conspiring to fix cargo rates customers in the United States and elsewhere were charged for international air shipments, and to fix wholesale and passenger fares for flights from the United States to Korea.

In January of this year, Qantas Airways Limited pleaded guilty and was sentenced to pay a $61 million fine for its role in a criminal conspiracy to fix the rates and shipments of cargo to and from the United States and elsewhere.

The federal probe prompted civil suits seeking penalties for the overcharges. In February, British Airways agreed to pay almost $136 million and Virgin Atlantic Airways Ltd $67.5 million to settle the claims.

Prosecutors said JAL employees participated in meetings, conversations and communications in — and out of — the United States not only to set the cargo rates but also to monitor and enforce them.

JAL, in a statement, said the plea agreement was the "best resolution" of the matter.

by Elizabeth Olson