BA, Air Canada settle cartel claim with Deutsche Bahn

British Airways, Air Canada, and Deutsche Bahn (DB), the German rail operator, have reached an out-of-court settlement in a longstanding air freight price-fixing cartel dispute before the Cologne Regional Court. The parties agreed to keep details of the settlement, including the amount, confidential, DB said in a statement. The case relates to the decision by the European Commission in 2010 to impose fines of almost EUR800 million (USD970 million) on 11 air freight operators for illegal agreements on fuel and security surcharges. The carriers coordinated their actions on surcharges for fuel and security without discounts over a six-year period (from December 1999 to February 14, 2006). Lufthansa (LH, Frankfurt Int’l) (and its subsidiary Swiss (LX, Zurich)) received full immunity from fines under the Commission’s leniency programme, as it was the first to provide information about the cartel. In 2013, DB subsidiary DB Barnsdale AG brought damages claims of EUR3 billion (USD3.6 billion) in the Cologne Regional Court against the companies involved, including Air Canada, Air France-KLM Royal Dutch Airlines and Martinair, British Airways; Cathay Pacific, Cargolux, JAL – Japan Airlines, LATAM Airlines, Lufthansa/Swiss, SAS Scandinavian Airlines, Singapore Airlines, and Qantas. DB Barnsdale AG not only asserted claims for damages on behalf DB Schenker (the logistics division of DB) but also from other freight forwarders and shippers who assigned their claims to them, including BMW, Continental, Bosch, Fujitsu, and the Kuehne & Nagel freight forwarding company. The latest agreement brings to seven the number of out-of-court settlements related to the case and represents a settlement of around 75% of the original claims. Four defendants – Cargolux; Cathay Pacific; LAN Chile/LATAM; and JAL – Japan Airlines – continue to dispute the claims in court. Even though insolvency proceedings were opened in the US in May 2020 on the assets of LAN Chile/LATAM, claims against them could be asserted against the other defendants since they were jointly and severally liable, DB said. Commenting on the latest agreement, DB Board member for Human Resources and Legal Affairs, Martin Seiler, said: “Even in economically difficult times, we consider it sensible and in the interests of all parties to seek amicable agreements between the parties instead of having to conduct lengthy processes. We are maintaining this willingness towards the remaining defendant cartel participants.”