Northwest agrees to pay $38 million for air cargo price fixing

Northwest Airlines has agreed to plead guilty to fixing prices on air cargo shipmentsand pay a $38 million criminal fine, the US Dept. of Justice announced.

According to charges filed yesterday, Northwest Airlines Cargo, which is now part of Delta Air Lines, “engaged in a conspiracy to fix the cargo rates for international air cargo shipments from at least July 2004 until at least February 2006.” Under the plea agreement, Northwest will cooperate with the department’s ongoing antitrust investigation into other airlines.

In a statement to ATW, Delta said: “The agreement between Northwest Airlines LLC and the Department of Justice relates to actions which occurred before the Delta-Northwest merger by certain employees of Northwest Airlines Cargo Inc., the former cargo division of Northwest Airlines. The agreement doesn't assert any misconduct by any current or former officer or member of the Board of Directors of Northwest LLC, Northwest Corp., Northwest Airlines or Delta."

It added that Northwest "terminated the employment of the individual who it believed had primary responsibility for the conduct in question."

A total of 16 airlines have pleaded guilty or have agreed to plead guilty in the DOJ’s ongoing investigation into price fixing in the air transportation industry (ATW Daily News July 13). To date, more than $1.6 billion in criminal fines have been imposed and four executives have been sentenced to serve prison time. Charges are pending against a fifth executive.

Northwest Airlines. Photo: Rob Finlayson.