The U.S. Justice Dept. rolled out more than $500 million in fines for four international airlines accused of price-fixing on cargo services, as the list of major airlines implicated in the investigation continues to grow.

Air France-KLM accounts for the bulk of the penalties – $350 million – although the carriers were fined separately since the offenses date back to 2001. Cathay will pay $60 million, Martinair $42 million and SAS $52 million. All the airlines pleaded guilty, but the fines must still be accepted by U.S. courts. The Air France-KLM penalties will represent the second-largest criminal fine ever imposed by DOJ.

The fines result from a long-running investigation by the Justice Dept., FBI and other agencies into a “conspiracy involving a number of the world’s largest airlines to manipulate air cargo transportation costs through a multi-year price-fixing scheme,” said Associate Attorney General Kevin O’Connor. “This conspiracy, conservatively, has affected billions of dollars of shipments.” O’Connor believes the total harm to U.S. consumers and businesses runs into hundreds of millions of dollars.

The airlines conspired to fix cargo rates, including base rates, fuel surcharges, and security charges. Fuel surcharges imposed by some of the carriers rose 10-fold, much more than the fuel price increase. Airline officers and employees carried out the price fixing during various meetings and discussions, in the U.S. and elsewhere. “The companies also monitored and enforced adherence to the agreed-upon cargo rates,” O’Connor said.

These are far from the first carriers to be swept up in this investigation. British Airways and Korean were both fined $300 million by U.S. authorities in August 2007, and earlier this year Qantas paid a $61 million fine and JAL a $110 million fine. With the latest plea agreements, the U.S. fines total $1.2 billion. The European Union has also been pursuing antitrust action against carriers.

SAS said its own fine was reduced to reflect its cooperation in the investigation. The carrier said DOJ also “recognized SAS’s commitment to an improved corporate compliance program,” and the carrier has taken steps to strengthen its internal compliance policy. SAS said it is involved in the European Commission investigation, although the results of this will not be known until later this year.

Air France-KLM is also included in the EC action. The carrier has made a EUR530 million ($835.2 million) provision for its 2007/2008 financial year due to the U.S. and EC investigations. Air France CEO Jean-Cyril Spinetta says the carrier “has taken thorough steps across the organization to prevent recurrence” of the conspiracy.

Photo: Air France