LUXEMBOURG (Reuters) - Air France-KLM (>> Air France-KLM) and 10 other airlines have won a challenge against a near 800 million-euro (£582.2 million) fine for fixing air freight charges, with Europe's second highest court saying on Wednesday that it found the EU competition regulators' decision contradictory.

The European Commission in a 2010 finding said that 11 air cargo carriers fixed surcharges for fuel and security costs from December 1999 to February 2006.

Air France took the biggest hit with a fine of 182.9 million euros while KLM came in second at 127.2 million euros. The two carriers merged to form Air France-KLM in 2004.

The EU decision has since then made the carriers a focus of companies such as Germany's Deutsche Bahn [DBN.UL], carmaker BMW (>> Bayerische Motoren Werke AG) and car supplier Bosch, which are seeking damages.

The airlines subsequently challenged the EU antitrust enforcer's decision. Judges agreed with their arguments, annulling the .

The court backed the airlines' view that the Commission had considered four distinct cartel infringements, while the grounds for its decision was based on the sense of there being one single and continuous period of wrongdoing. The court said that penalised companies must be able to understand and to contest liability.

"The grounds and the operative part of the decision are contradictory," the judges said.

The Commission did not immediately reply to an email for comment. Air France-KLM shares added gains after the court verdict and were trading up 3.6 percent at 1455 GMT.

The other carriers in the lawsuits were Air Canada (>> Air Canada), Martinair, British Airways (>> International Consolidated Airlns Grp SA), Cargolux, Cathay Pacific Airways (>> Cathay Pacific Airways Limited), Japan Airlines (>> Japan Airlines Co Ltd), LAN Chile, SAS (>> SAS AB) and Singapore Airlines (>> Singapore Airlines Ltd.).

Lufthansa (>> Deutsche Lufthansa AG), which escaped a sanction because it blew the whistle on the cartel, also took legal action. Qantas (>> Qantas Airways Limited), which was fined 8.9 million euros, did not challenge the Commission's decision.

(Reporting by Michele Sinner, writing by Foo Yun Chee; editing by Philip Blenkinsop/Jeremy Gaunt)

By Michele Sinner and Foo Yun Chee