U.S., EU regulators probe cargo price fixing by airlines

LONDON: Regulators in the U.S. and Europe are investigating possibilities of price fixing in the air cargo industry and several leading trans-Atlantic carriers have been brought under the scanner. In Europe, the European Commission carried out surprise inspections Tuesday at the offices of major European airlines, while the justice department in the U.S. has issued subpoenas to several U.S.-based carriers.

British Airways, Air France, KLM, Lufthansa and Cargolux Airlines of Luxembourg were subject of the inspections in Europe and these airlines said they are cooperating with the authorities probing pricing practices in the industry.

In the U.S., American Airlines said it has a subpoena in this regard. The airline clarified that it has not been told that it was a target of the investigation and did not receive a search warrant.

United Airlines said it received an inquiry from European Commission at its United Cargo office in Frankfurt.

Justice department officials have also searched cargo offices of Japan Airlines at New York’s JFK International Airport. Japan Airlines’ Frankfurt office was also searched by European Commission officials.

South Korean airlines Korean Air Co. and Asiana Airlines Inc., confirmed their offices in Seoul were raided by the local antitrust watchdog, the Fair Trade Commission. The airlines said their offices in Europe and U.S. were, however, not raided.

In Washington, a justice department spokesperson said the U.S. investigators are working with the EU and other authorities to investigate possible “anti-competitive behavior.”

An unnamed federal law enforcement source revealed the raids were carried out on airlines in major cities across the country, including Chicago, New York and Los Angeles.

In Brussels, the European Commission said it had carried out “unannounced inspections” at the offices of several air cargo carriers and these constitute preliminary steps in investigations into suspected cartels.

EC said in a statement that the fact that it carried out such inspections does not mean that the companies are guilty of anti-competitive behavior nor does it prejudge the outcome of the investigation itself.

The commission’s competition spokesperson Jonathan Todd said the commission has reason to believe that the companies concerned may have violated Article 81 EC-Treaty, which prohibits practices such as price fixing. If it is proved, the commission can impose fines.