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Airline settles Canada cvil suit over price fixing for $6 million

Hong Kong-based Cathay Pacific Airways Ltd., has agreed to pay CA$6 million to settle a number of antitrust class action lawsuits in Canada that have accused the firm of conspiring with other airlines to increase international air cargo rates. The lawsuits came about after European Commission and U.S. Department of Justice investigations accused the air cargo company of conspiring through conversations, meetings and other modes of communication to artificially set the rates for air cargo routes.

Although Cathay Pacific publicly announced on the Hong Kong stock exchange that it is a defending itself in a civil antitrust suit in Canada over its cargo operations, the company would not admit that it had committed unlawful action, wrongdoing or that it was liable as a result of its settlement agreement.

Cathay Pacific also said that its settlement is preliminary at this point because it has yet to be approved by the court. The settlement money, which will be paid from the company's existing savings, should not negatively impact its future income-generating capacity, the airline said.

While this settlement might seem significant, it is relatively small compared to a New York federal court settlement the air cargo carrier agreed to earlier in December. In that civil settlement, the company paid US$65 million of a US$360 million settlement to thousands of customers. That settlement was recently approved after review by a U.S. District Court judge.

In addition to Cathay Pacific, the New York case included settling defendants like Korean Airlines, Singapore Airlines and China Airlines. The litigation dated back to 2006, and included over 90 consumer civil suits against over 24 air cargo carriers. Since these cases were consolidated in New York federal court, plaintiffs have netted over $1 billion in settlements.

As of Monday, Cathay has not agreed to comment on this smaller settlement in Canada civil court. However, more information is expected soon.

Large scale civil lawsuits in Alberta are often settled rather than going to trial. This helps firms avoid a potentially bankrupting ruling against them, and helps them control the outcome of the suit to be as financially manageable as possible.

Source: Law360, "Cathay Pacific To Pay $4.5M To Settle Canadian Cargo Suits," Bryan Koenig, Nov. 30, 2015

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