Airlines Come Under EU-US Cargo Cartel Probe | Business| Economy and finance news from a German perspective | DW | 16.02.2006
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Airlines Come Under EU-US Cargo Cartel Probe

The authorities have raided the offices of more than a dozen of international cargo airlines in an ongoing EU-US antitrust investigation on shady price fixing deals.


Romantic views often come at a high price -- even for the shipping containers on cargo flights

EU and US authorities have launched an investigation into more than a dozen airlines, including international heavyweights such as Lufthansa, British Airways, American Airlines and United Airlines, suspected for reaching mutual agreements on fixing prices in the cargo industry.

Spokespeople for the European Commission, the US Department of Justice and the FBI confirmed the investigation was taking place, but refused to provide details on Wednesday.

Seebeben Hilfe für die Opfer Flughafen Ostende Belgien

The companies pumped up their prices based on what they called external factors

One of the targeted airlines, however, Scandinavian Airlines System (SAS) said its offices were raided by European Union antitrust authorities on Tuesday. The company said in a statement issued late on Tuesday that "currently, SAS Cargo sees no reason to suspect any violations."

It insisted that the company's management "views any form of competition violation very seriously."

The surprise inspections of the airline were part of a EU Commission investigation into suspected cooperation since year 2000 involving "routes within Europe as well as to countries outside the European union," SAS said.

Serious charges

Airlines were suspected of reaching agreements regarding surcharges to offset external cost increases, it said.

These were high fuel prices, costs for additional security measures in the wake of the Sept. 11, 2001 attacks in the United States, and surcharges for war-risk insurance premiums in connection with the 2003 Iraq war, SAS said.

British Ariways (BA) streicht Flüge aus Sicherheitsgründen

British Airways confirmed it was being investigated

British Airways said earlier Tuesday it had received a request for information from both the EU executive and the US Justice Department as part of a probe into a suspected cartel of airlines and air freight companies.

It added that it had always conformed with anti-trust regulations and would cooperate with the EU and US authorities.

Air France and Deutsche Lufthansa AG said they were also being investigated by the EU authorities and would fully cooperate.

Global conspiracy?

Hong Kong's Cathay Pacific and Japanese flag carrier Japan Air Lines (JAL) were both drawn into the EU-US probe.

Hirokazu Inoue, a spokesman for JAL said Asia's largest airlines had been raided.

"Our office in Frankfurt was raided by the European Union's anti-monopoly authorities," Inoue said.

Sicherheit im Flughafen

Increasing security costs are cited as one of the reasons for high prices

"We have nothing to say about the matter as it is still under investigation but we will fully cooperate with the authorities on the investigation," he added.

Cathay Pacific said Wednesday it was among "a number of international airlines" caught up in the joint EU and US investigation.

In a statement, the company denied any wrongdoing and said it was cooperating with investigators.

"Cathay Pacific is in cooperation with the European Union Commission and United States Department of Justice in respect to their investigation into air cargo operations," the statement said.

"We understand that they have also requested information from a number of international airlines," it added.

A Cathay Pacific spokeswoman said the inspection of its premises had been unannounced but she would not characterize it as a raid. "I don't know what happened elsewhere but in Hong Kong it was very business-like," the spokeswoman said. "Cathay is a law-abiding company."

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