Ex-executive of British Airways to serve 8-month prison sentence, pay fine for cargo price-fixing

A former executive of British Airways has agreed to serve eight months in prison and pay a fine of $20,000 (£11,200) for his role in a conspiracy to fix air-cargo prices.

Ex British Airways exec price-fixing case

Keith Packer, a British citizen and former commercial general manager for the World Cargo business of British Airways, agreed to plead guilty to the charges as a part of an investigation by the United States Department of Justice into price-fixing in the airline industry.

The plea agreement between Keith Packer and the US Department of Justice is still subject to court approval.

Meanwhile, competition officials from around the world are investigating the airfreight industry in what has turned out to be the world’s biggest investigation into a cartel.

Further charges are expected to be brought by the European Union against the airlines involved in the price-fixing scandal.

In 2007, British Airways, the flag-carrier airline of the United Kingdom, had pleaded guilty to fixing the price of cargo rates and passenger fuel surcharges on long-haul flights and had paid a fine of $300 million. Following this, Korean Air Lines, Qantas Airways, Japan Airlines and European airlines, including KLM, have all pleaded guilty to conspiracy to fix charges and have been fined.

According to the United States Department of Justice, Keith Packer and others were involved in a conspiracy from at least March 2002 until February 2006.

Keith Packer is the third individual to be charged as a part of the investigation initiated by the US Department of Justice: Bruce McCaffrey, former highest-ranking executive of Qantas Airways who was employed in the United States, had pleaded guilty and was sentenced to serve six months in prison and pay a criminal fine of $20,000 for fixing cargo rates. Later, Timothy Pfeil, former highest-ranking cargo executive in the United States for Scandinavian Airlines System (SAS), pleaded guilty to conspiring to fix rates.

Virgin Atlantic and its executives involved in the scandal avoided prosecution as they were granted leniency deals by the authorities for being the first company to volunteer information on the fixing of the passenger surcharges in the conspiracy with British Airways.

Currently, over 20 airlines are under investigation in the cargo price-fixing investigation.

Till now, the total fine imposed by the United States Department of Justice on the erring airlines have come to over $1.2 billion, the highest fines ever imposed in a criminal anti-trust investigation

The investigation by the US Department of Justice is on.