All Nippon Airways to plead guilty to price fixing on cargo, passenger services

[News_Editor]

All Nippon Airways to plead guilty to price fixing on cargo, passenger services

2010-11-02 00:30:27 GMT+7 (ICT)

WASHINGTON, D.C. (BNO NEWS) -- All Nippon Airways (ANA) has agreed to plead guilty and will pay a $73 million criminal fine for its role in two separate conspiracies to fix prices in the air transportation industry, the U.S. Justice department said on Monday.

Prosecutors said Japan-based ANA engaged in a conspiracy to fix one or more components of cargo rates charged for international air cargo shipments from at least as early as April 1, 2000 until at least February 14, 2006.

The company was also charged with engaging in a conspiracy to fix unpublished passenger fares on tickets purchased in the United States from at least as early as April 1, 2000 until at least April 1, 2004.

ANA has also agreed to cooperate with the ongoing antitrust investigation of the U.S. Justice Department, which charged ANA with two counts of price fixing in violation of the Sherman Act. This carries a maximum fine for corporations of $100 million for each violation committed after June 22, 2004 and $10 million for violations committed before that date.

Including Monday's charge, a total of 19 airlines and 14 executives have been charged in the Justice Department's ongoing investigation into price fixing in the air transportation industry.

In addition, to date, more than $1.6 billion in criminal fines have been obtained and four executives have been sentenced to serve prison time. Charges are pending against the remaining 10 executives.

-- © BNO News All rights reserved 2010-11-02

[RIJoe]

And where, pray tell, does the $1.6 billion go or should I say, whose pocket?

[geriatrickid]

And where, pray tell, does the $1.6 billion go or should I say, whose pocket?

Airline industry. They are struggling, don't you know. They need subsidies and bailouts to ensure that their CEO and senior exectutives receive multi million dollar pay packages. This helps retain the best talent needed to reduce service even further, and to deliver the worst possible financial results.

[lomatopo]

And where, pray tell, does the $1.6 billion go or should I say, whose pocket?

If they really do get paid they go to the United States Treasury.

Businesses which have little distinction in their products or services (lysine is lysine whether it comes from AMD or Ajinomoto) face huge competitive pressures. Often they'll extend a special low price to a single customer, for all sorts of reasons (quarterly revenue pressures, locking in a customer long term) which everyone (competitors, customers) quickly finds out about leading to downward spiraling prices and decreased profitability. Price fixing, bid rigging, market allocation etc. all help to keep prices high so it is hardly surprising that competitors routinely attempt to collude on pricing, bidding and market allocation. A famous, early case involved General Electric and Westinghouse in the 1950's.