LAN Cargo Approves Settlement Agreement Relating To Cargo Price Fixing


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LAN Cargo Approves Settlement Agreement Relating To Cargo Price Fixing

By Steve Hall

June 9, 2011 - LAN Cargo announces that on June 6, its board of directors approved a settlement agreement related to the civil class action pending before the United States District Court for the Eastern District of New York. 

The civil class action was initiated against 42 airlines, among which LAN Cargo and ABSA were included. As of today, ten airlines including: Lufthansa, American Airlines, Japan Airlines, Air France-KLM, SAS, All Nippon Airways, Cargo lux, Qantas, Thai Airways and British Airways have all reached similar settlement agreements with the class action plaintiffs and agreed to pay settlement amounts which total US$ 367.9 million.

These companies engaged in conspiracy in the United States and elsewhere to eliminate competition by fixing the cargo rates charged to customers for international air shipments, including to and from the United States. Once this settlement agreement is approved by the United States District Court for the Eastern District of New York, it will conclude the civil class action lawsuit against LAN Cargo and ABSA.

The settlement agreement establishes that LAN Cargo pay the amount of US$59.7 million and ABSA, in which LAN Cargo has an ownership stake, pay US$6.3 million, for a total amount of US$ 66 million. The payment of the full amount will be disbursed no later than June 14, 2011.  

The civil class action originated as result of an investigation initiated by the Department of Justice of the United States ("DOJ") of a significant number of airlines, among them LAN Cargo and ABSA. The investigation was concluded with the execution of a Plea Agreement that was announced by the Company on January 21, 2009. As of today, 19 airlines have executed similar plea agreements with the DOJ. 

The company maintains a policy of rigorous compliance with all applicable laws and regulations in the countries in which it operates. As part of its permanent commitment to good corporate governance and transparency in its corporate actions, LAN has further reinforced the control mechanisms of its strict compliance program. Furthermore, the company has implemented a new code of conduct that will govern all of its employees worldwide. 


LAN Airlines is one of the leading passenger and cargo airlines in Latin America. The company and its affiliates serve over 76 destinations around the world through an extensive network that offers full connectivity within Latin America, while also linking the region with North America, Europe and the South Pacific, as well as 93 additional international destinations through its various code share agreements. LAN Airlines and its affiliates have a leading position in their respective domestic markets of Chile and Peru as well as an important presence in the Argentinean and Ecuadorian domestic markets. In November 2010, LAN acquired Colombian airline AIRES.

Currently, LAN Airlines and its affiliates operate 123 passenger aircraft while LAN Cargo and its respective affiliates have a fleet of 14 dedicated freighters. The Company has one of the youngest fleets in the world which has meant greater efficiency and a significant reduction in CO2 emissions, reflecting its strong commitment to the protection of the environment.

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