Cathay Pacific, Singapore Air Fined

Cathay Pacific and Singapore Airlines have been asked to pay some $23 million for their involvement in a global air cartel.

The Singapore carrier is under scrutiny for fixing the prices of meat that are earmarked to feed Australian and American troops that were stationed in the Middle East. 12 other airlines, including Qantas, have also been slapped with fines for their involvement in the illegal freight cartel.

The cargo unit of Singapore Airlines admitted to attempting to fix the price of meat exports that were allocated for troops in the Middle East. Singapore Airlines was believed to be in cahoots with Malaysia Airlines.

The cartel followed the US’s January 2003 decision to deploy some 35,000 troops in the Middle East. The Australian government also sent additional troops to provide assistance.

An email written by an executive of Singapore Airlines indicated that the airline was aware that US troops’ demand for meat in the Middle East is on the rise. The email also said that that Emirates, Singapore Airlines and Malaysian Airlines were the only serious players that time.

The executive also said that the company is prepared to increase the price 20 cents if the other players do the same.

Sydney’s Federal Court has fined Singapore Airlines $11.75 million and Cathay Pacific $11.25 million. In 2008, Qantas was fined $20 million.

Similarly, the court fined Emirates $10 million for a number of infractions—fixing security surcharge, fuel prices, and customs fees for freight coming from Indonesia to other countries, including Australia.

Rod Sims, chairman of Australian Competition and Consumer Commission, said the penalties imposed on erring airlines should serve as a deterrent to any attempt to be involved in illegal cartel activity.