Brazil regulator fines AA and Alitalia US$127 million for price-fixing

AMERICAN Airlines and Alitalia were among four airlines fined a total of US$127 million for air cargo price-fixing in Brazil, according to the Council for Economic Defence (CADE) the country's national antitrust authority.

The two major airlines, along with Brazilian airlines Varig and Tam Cargo, as well as seven individuals, were fined recently "for cartel formation in the international air cargo sector," CADE said, reported AFP.

"The four airlines and the employees involved were condemned for fixing the price and the date for application of additional fuel charges in international air cargo in Brazil", a CADE statement said.

CADE also said Germany's Lufthansa and Swiss International Airlines escaped punishment because they assisted with the investigation, which began in 2006. Air France and KLM signed a deal with CADE early this year under which they confessed their role and agreed to pay $6 million.

CADE said the collusion occurred between 2003 and 2005, with participating companies gaining control of about 60 per cent of the market during that period.

"The price cartel generated abusive prices that were passed on to consumers and to the supply chain," CADE president Vinicius Marques de Carvalho said. "This practice clearly had an impact on the country's logistics costs," he added.