U.S., EU launch dawn raids to probe air cargo cartels
The U.S. Justice Department and European Commission Tuesday launched a joint probe into suspected price fixing in the air cargo industry.
Major airlines including American Airlines, United Airlines, British Airways, Air France, Lufthansa, Cathay Pacific, as well as cargo operators like Cargolux were all subjected to early morning raids Tuesday in offices in Europe, Asia and the United States.
“The commission has reason to believe that the companies concerned may have violated (a European Union) treaty, which prohibits practices such as price fixing,” the EU said in a statement.
Under EC rules, any company found guilty of anticompetitive and cartel activity is liable to a fine of up to 10 percent of its annual revenue. In the United States, such behavior is punishable with prison sentences.
“British Airways’ policy is to conduct its business in full compliance with all the applicable competition laws,” it said in a statement adding that it will assist the investigations.
“The cartel authorities are investigating possible cartel activity in the area of air cargo. Lufthansa will fully support the investigations,” said Lufthansa.
“Cargolux fully cooperates with the EU and United States authorities and underlines that its commercial practices fully respect all the rules and regulations regarding competition law in the European Union, as well as those of other parts of the world, including the United States where it operates,” said Luxembourg-based all cargo airline Cargolux. “Cargolux is fully confident about the outcome of this investigation and looks forward to its positive conclusion.”
The United Kingdom’s Freight Transport Association, which represents British shippers and logistics companies, welcomed the investigation. “Shippers have long since identified and been concerned by the application of very similar levels of surcharges applied by different airlines, in respect of fuel price increases, new security measures and other factors,” said Andrew Traill, the FTA’s head of air freight policy.
“As such FTA welcomes the joint EU-U.S. cartel probe on airlines and very much hopes that the investigation will be able to give the industry a clean bill of health. Shippers are entitled to expect to operate in an environment of keen commercial competition regarding both cost and service and events in the recent past have created doubts in confidence,” Traill said.