Air France-KLM fined $350 million
Thursday 26 June 2008
French-Dutch airline company Air France-KLM was ordered by the US Justice Department to pay $350 million for fixing air cargo prices in the US. Cathay Pacific, Danish carrier SAS and Martinair Holland were also charged.
Four major airlines, including Air France-KLM and Cathay Pacific Airways, have agreed to pay US criminal fines totalling 504 million dollars to settle charges they conspired to fix air cargo prices, officials said Thursday.
The US Justice Department said a subsidiary of Danish carrier SAS and Martinair Holland had also agreed to plead guilty to similar charges as part of an ongoing probe tied to a multiyear conspiracy.
"This price-fixing conspiracy undermines our economy and harms the American people who, due to lack of true competition in this area, end up footing the bill," said Kevin O'Connor, an associate US attorney general.
As an American citizen, I know that laws against price-fixing are on the books. These are supposed to protect the economy of the nation, competitiveness of business, and pocketbooks of the "little guy".
For years many of us have watched gas stations adjust their rates, in some cases hourly, to match or best their competition. One station in Commerce City CO has been on TV several times in recent months for doing this with the immediately adjacent stations. On any given day, it is likely that we will find all stations the same, or a very few cents difference throughout a major city (where taxes, cost of real estate, neighbourhood wage expectations, etc should, reasonably, affect the fixed and variable additions to the wholesale price the station would charge) -- and across brands.
Competitive adjustment in pricing (in the case of gas, this may be a penny or two difference), perhaps, but the majority of station the same on a consistent basis? Government investigations into price-fixing in the US oil and petrol industry repeatedly fail to acknowledge price-fixing. It seems they are willing to do it when it involves international air cargo, however.
What do you think?
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Comments: 20
As long as GWB is in the White House, there will be no investigations like that. I'm not sure if it matters WHO is in the White House at this point.
You'll have to excuse me, I have a defeatist attitude today.
Oh!
There's an election coming up.
Do something about it - never.
If they are setting their own prices, they have a more generous hook up with the corporation than any service station owners I've known. A chain, such as Jackson's food stores, will buy their gas on the open market and are solely responsible for the pricing but most individual owners no longer do that.
Even when I was in business in the sixties, I dis own the gas in the ground but the company still told me what I would sell it for. The person who purchased the business from me was changed over to consignment.
If individual dealers had their way about it they might well cut prices to bring in more business. However, I don't care what they sell it for, there is little profit in it for the dealer. Most of it goes to the oil company with a bit for the jobber who brings it. No dealer can go up too much because he'll be out of business.
I've seen a dealer try to increase his margin on the intermediate grade by raising it one cent and after a week or so had to cut it back to what the others were charging.
Perhaps things are different in the East part of the country than in Idaho.