AIR CANADA NOTIFIED OF EUROPEAN COMMISSION DECISION IN CARGO RATES AND CHARGES COMPETITION MATTER (1999-2006)
MONTREAL, Nov. 9 /CNW Telbec/ - Air Canada confirmed today that the European Commission issued a decision finding that 12 air cargo carriers (including groups of related carriers) had infringed European Union competition law in the setting of certain cargo charges and rates for various periods between 1999 and 2006. Air Canada is among the carriers subject to the decision and a fine of 21,037,500 Euros (approximately C$29.4 million at an exchange rate of $1.3970) has been imposed on it.
The amount of the fine is more than adequately covered by the $125 million provision taken by the company in 2008, and the company is studying the decision and will determine its next steps, including possible appeal.
This decision of the European Commission arises from one of a series of investigations by various competition authorities into alleged anti-competitive cargo pricing activities and other related civil proceedings. During 2008, Air Canada recorded the provision as a preliminary estimate of its exposure relating to these matters and Air Canada's assessment as to the potential outcome for certain of them. The provision specifically addressed the proceedings before the European Commission, but not those in all jurisdictions. Management has determined it is not possible at this time to predict with any degree of certainty the outcome of all proceedings and investigations. As stated above, Air Canada is studying the decision issued by the European Commission and, based on the outcome of this review and any updates regarding the proceedings and investigations in other jurisdictions, will provide further information based on the assessment, as appropriate, and adjust the provision in its results for the fourth quarter of 2010 as required. Additional information is available in Air Canada's public disclosure file available at www.sedar.com.