American settles cargo price fixing lawsuit

Washington DC
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American Airlines says it is paying $5 million to resolve a class action lawsuit brought by shippers claiming to be victims of price fixing, but is refusing to acknowledge any wrongdoing.

"American Airlines has done nothing wrong, and the settlement makes it clear that American is admitting no fault or liability," says an American spokesman. Rather than face the expense and uncertainty of litigation, American decided a settlement was in "the best financial decisions for American", he says.

US and European officials determined after an investigation that a group of airlines had conspired to fix cargo prices and fuel surcharges. The US Department of Justice says that more than a dozen airlines have pleaded guilty and paid criminal fines totalling more than $1.6 billion. Thus far, Lufthansa Air France KLM, Japan Airlines and American have agreed to settle, according to the Associated Press.

Michael Hausfeld, an attorney who represented shippers in the lawsuit, says in a statement he is disappointed with the settlements offered by Lufthansa and Air France KLM as they did not provide compensation to "indirect purchasers of airfreight services, including those in Europe, who have also suffered losses". Hausfeld filed class action lawsuits in the USA in an effort to recover damages from the carriers involved in the scheme, following investigations that culminated in February 2006.

According to a settlement agreement filed this week in federal district court in New York, shippers and American Airlines agreed to settle a year ago and American has been cooperating since that time.

"To be clear this is not a 'penalty' this is not a settlement with any government, but a settlement of the civil class action," says American. "We will continue to provide information to governments and civil plaintiffs as they pursue action against other carriers."