Polar Air Cargo LLC Agrees to Plead Guilty to Price Fixing on Air Cargo Shipments

Company Agrees to Pay $17.4 Million Criminal Fine

WASHINGTON—Polar Air Cargo LLC has agreed to plead guilty and to pay a $17.4 million criminal fine for its role in a conspiracy to fix prices in the air transportation industry, the Department of Justice announced today.

According to a one-count felony charge filed today in U.S. District Court for the District of Columbia, Polar Air Cargo LLC’s co-conspirators engaged in a conspiracy to fix the cargo rates charged to certain customers for international air cargo shipments between the United States and Australia from at least as early as Jan. 1, 2000, and continuing until at least Feb. 14, 2006. Polar Air Cargo LLC, an American airline based in Long Beach, Calif., joined and participated in the conspiracy from at least as early as Jan. 1, 2000, until April 30, 2003. Under the plea agreement, which is subject to court approval, Polar Air Cargo LLC has agreed to cooperate with the department’s ongoing antitrust investigation.

Air cargo carriers transport a variety of cargo shipments, such as heavy equipment, perishable commodities, and consumer goods, on scheduled international flights.

According to the charge, Polar Air Cargo LLC carried out the conspiracy by agreeing during meetings, conversations, and communications on certain components of cargo rates for shipments between the United States and Australia and by levying cargo rates in accordance with the agreements reached. As a part of the conspiracy, Polar Air Cargo LLC monitored and enforced adherence to the agreed-upon rates.

Polar Air Cargo LLC is charged with price fixing in violation of the Sherman Act, which carries a maximum fine of $10 million for corporations for offenses committed before June 22, 2004. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

Including today’s charge, as a result of this investigation, a total of 17 airlines have been charged in the Justice Department’s ongoing investigation into price fixing in the air transportation industry. To date, more than $1.6 billion in criminal fines have been imposed and four executives have been sentenced to serve prison time. Charges are pending against three other executives.

The airlines that have pleaded guilty, as a result of the department’s investigation into the air transportation industry are: British Airways Plc, Korean Air Lines Co. Ltd., Qantas Airways Limited, Japan Airlines International Co. Ltd., Martinair Holland N.V., Cathay Pacific Airways Limited, SAS Cargo Group A/S, Société Air France, Koninklijke Luchtvaart Maatschappij N.V. (KLM Royal Dutch Airlines), EL AL Israel Airlines Ltd., LAN Cargo S.A., Aerolinhas Brasileiras S.A., Cargolux Airlines International S.A., Nippon Cargo Airlines Co. Ltd., Northwest Airlines LLC, and Asiana Airlines Inc. Airline executives who have pleaded guilty as a result of the investigation are Bruce McCaffrey of Qantas, Keith Packer of British Airways, Franciscus Johannes de Jong of Martinair, and Timothy Pfeil of SAS. On Aug. 12, 2009, Jan Lillieborg, a citizen and resident of Sweden and former vice president of global sales for SAS Cargo, was indicted for participating in a conspiracy to suppress and eliminate competition by allocating customers and coordinating surcharge increases for international air shipments to and from the United States. On Aug. 26, 2010, Joo Ahn Kang, former president of Asiana, and Chung Sik Kwak, former vice president of the Americas region of Asiana, both citizens and residents of the Republic of Korea, were indicted for participating in a conspiracy to suppress and eliminate competition by fixing passenger airfares for travel between the United States and Korea.

Today’s charge is the result of a joint investigation into the air transportation industry being conducted by the Antitrust Division’s National Criminal Enforcement Section, the FBI’s Washington Field Office, the Department of Transportation’s Office of Inspector General, and the U.S. Postal Service’s Office of Inspector General. Anyone with information concerning price fixing or other anticompetitive conduct in the air transportation industry is urged to call the Antitrust Division’s National Criminal Enforcement Section at 202-307-6694 or visit www.justice.gov/atr/contact/newcase.htm or call the FBI’s Washington Field Office at 202-278-2000.