Mexico: Regulator fines two airlines for cartel activities

Mexico’s Federal Commission of Economic Competition has fined the airlines Aerovías de México (Aeromexico), Mexicana de Aviación (Mexicana) and three individuals involved in absolute monopolistic practices in the passenger air transport services market.

The airlines have been fined for their use of contracts, agreements, arrangements or deals intended to manipulate the prices they would charge users through the establishment of base or minimum prices on various routes in and out of Mexico, with said agreements happening between April 2008 and February 2010.

According to the investigation launched in February 2015, various individuals acting on behalf of these airlines exchanged information on their rates in order to define the base or minimum price for the air transport service of each economic agent on certain routes. This was done through multiple emails from official and unofficial accounts, which were also used to monitor the cartel participants’ adherence to the agreements.

Consequently, COFECE have decided to fine Aeromexico with for $86,190,000 pesos (US$4.5 million). While Mexicana would have been subject to a similar fine, the decision was made to impose the minimum amount applicable because the company has been declared bankrupt. Finally, fines were applied to three individuals for a total amount of $2,020,972 pesos (US$105,340).

In response, Aeroméxico announced its disagreement with the decision, describing the resolution as “discriminatory and untimely, as it refers to alleged events that occurred a decade ago and involves a company that has suspended operations for more than eight years.” The airline said it will fight the resolution through legal means.