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British Airways, LAN to Pay $155.5 Million in Cartel Suits

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June 7 (Bloomberg) -- British Airways and Chilean carrier Lan Airlines SA agreed to pay a total of $155.5 million to cargo customers to settle a U.S. lawsuit over their involvement in a global price-fixing cartel that increased fuel surcharges.

The deals, which must be approved by a New York judge, will resolve claims by companies that used the airlines’ freight services from 2000 through 2006, the law firm Hausfeld LLP said today in a statement. British Airways will pay $89.5 million, while Santiago-based Lan will pay $66 million.

“We will continue our efforts to pursue recoveries for the huge number of victims of this cartel both in the U.S. and around the world,” Michael Hausfeld, a lawyer for the freight shippers, said in the statement.

European Union regulators in November fined British Airways and 10 other carriers a total of 779.4 million euros ($1.15 billion) for coordinating fuel and security surcharges. London-based British Airways, whose share of the fine was 104 million euros, pleaded guilty in the U.S., Australia and Canada and was later fined by a South Korean regulator.

“We are pleased that we have reached a settlement over these claims made by cargo customers in the U.S.,” British Airways spokesman Euan Fordyce said today in a phone interview.

Lan’s payment will be made by June 14 and won’t affect the company’s results, the carrier said in a statement on the website of Chile’s securities regulator.

Other Settlements

The class-action lawsuit in New York has generated settlements totaling about $434 million, including $87 million from Air France-KLM Group last year and $85 million from Deutsche Lufthansa AG in 2006, Hausfeld said. AMR Corp.’s American Airlines last year agreed to pay $5 million and provide witnesses and evidence to help the customers.

British Airways in November won a U.K. Court of Appeal ruling blocking hundreds of air-cargo customers from forming a group in a U.S.-style class action lawsuit over the cartel.

British Airways may pay as much as an additional $500,000 to notify customers of the settlement. The carrier is part of the International Consolidated Airlines Group SA, after the company completed its merger with Spain’s Iberia in January.

Cargo airlines often work together to carry freight, setting aside as much as 10 percent of space for partners. Carriers’ price structures include surcharges that change depending on factors such as oil prices and security measures.

The case is In re: Air Cargo Shipping Services Antitrust Litigation, 06-MD-1775 (JG) (VVP), U.S. District Court, Eastern District of New York (Brooklyn).

To contact the reporter on this story: Erik Larson in New York at elarson4@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net

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