UPDATE 1-BA, Air France face cargo cartel fines in Nov-sources

* Cathay Pacific, SAS also expected to be fined

* Lufthansa told the EU about the cartel and won’t be fined

* EU antitrust decision due on Nov. 9 – source

* Substantial fines expected, but no record penalty

* More than 20 airlines probed

(Adds details throughout)

By Foo Yun Chee

BRUSSELS, Oct 21 (BestGrowthStock) – British Airways (BA) (BAY.L: ),
Air France-KLM (AIRF.PA: ), and SAS (SAS.ST: ) are among several
airlines set to be fined by European Union (EU) antitrust
regulators next month for fixing cargo prices, several sources

The European Commission charged the carriers in December
2007 with taking part in an air freight cartel, following raids
on both sides of the Atlantic a year earlier that also involved
the U.S. Department of Justice.

The EU watchdog did not identify the targets of the probe,
but BA, Lufthansa (LHAG.DE: ), SAS, Air France-KLM, Japan Airlines
(JALFQ.PK: ), Cathay Pacific (0293.HK: ), Japan Airlines (JALFQ.PK: ),
All Nippon Airways (9202.T: ), Air Canada (ACa.TO: ) and Alitalia
all confirmed they had been investigated.

“A commission decision is expected on Nov. 9,” said one of
the sources with direct knowledge of the matter. Competition
Commissioner Joaquin Almunia is expected to announce the fines
at a news conference that day.

Another source said on Thursday that fines would be
substantial, but that the total was unlikely to top the 1.38
billion euro ($1.92 billion) penalty slapped on a cartel of car
glassmakers in 2008, due to the large number of leniency
applicants, and defence arguments citing the effects of the
credit crisis.

The source said continuing debate within the commission on
the size of the fines could delay the decision.

A date has not been set for the decision, said Amelia
Torres, EU spokeswoman for competition matters.

It would be “extremely unlikely” that companies arguing
their inability to pay due to the crisis would be able to
convince the commission, one of the sources said.

Lufthansa previously said it told the commission about the
cartel and therefore would not face a fine.

The probe initially targeted more than 20 carriers,
including Qantas (QAN.AX: ), Singapore Airlines (SIAL.SI: ), Korean
Air (003490.KS: ), Cargolux [CLUX.UL], Malaysia Airlines (MASM.KL: )
and Alitalia, but not all are expected to be found guilty.

The commission can penalise companies up to 10 percent of
their global sales for breaching EU rules, but fines rarely
reach that level.

BA and Korean Air each paid $300 million in criminal fines
in the U.S. price probe in 2007; Air France-KLM agreed to a $87
million U.S. civil antitrust claims settlement in July.
(Editing by Rex Merrifield, Sharon Lindores)
($1=.7181 Euro)

UPDATE 1-BA, Air France face cargo cartel fines in Nov-sources