Ex-execs from two Japanese airlines charged with air cargo price fixing

An Atlanta grand jury has returned an indictment against a former executive of Japan Airlines International (JAL) and two former executives of Nippon Cargo Airlines for participating in a conspiracy to fix air cargo rates on shipments to and from the US.

The indictment charges Takao Fukuchi, former president of JAL Cargo Sales, and Yoshio Kunugi and Naoshige Makino, both former senior executives for Nippon Cargo Airlines, with conspiring with others to suppress and eliminate competition by fixing and coordinating certain components of cargo rates charged to customers for international air shipments to and from the US.

Fukuchi and Kunugi are charged with entering into and participating in the conspiracy between December 1999 and February 2006. Makino is charged with joining and participating in the conspiracy between June 2001 and February 2006.

According to the indictment, Fukuchi, Kunugi, Makino and co-conspirators participated in meetings, conversations and communications to discuss and fix certain components of cargo rates and coordinated the timing of changes to those rates.

As part of the conspiracy, Fukuchi, Kunugi, Makino and co-conspirators implemented collusive cargo rates in accordance with the agreements reached, and accepted payments for shipments at collusive and non-competitive rates.

All three are charged with price fixing in violation of the Sherman Act, which carries a maximum penalty for each individual of ten years in prison and a US$1 million criminal fine. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

A total of nineteen airlines and seventeen executives, including Fukuchi, Kunugi and Makino, have been charged in the Justice Department’s ongoing investigation into price fixing in the air transportation industry.

To date, more than US$1.7 billion in criminal fines have been imposed, and four executives have been sentenced to serve jail time.