Airline cargo prices under international investigation

2 March 2006
More legal news

02 March 2006 | Anusha Bradley

UK cargo buyers have welcomed an international investigation into claims of an air freight price-fixing cartel.

The Freight Transport Association (FTA) said members had complained that increases in surcharges by airlines were, in some cases, amounting to half the overall cost of cargo transport and were "uncannily similar". The inquiry is understood to focus on surcharges.

Last week, competition authorities on both sides of the Atlantic launched raids on airline offices. The European Commission and US Department of Justice searched the offices of major international airlines, including British Airways, Virgin Atlantic, United Airlines, Lufthansa and Cargolux Airlines International in Luxembourg.

The airlines confirmed to SM that they had received "requests for information" and a visit from authorities. The Office of Fair Trading is also assisting in the price-fixing investigation.

Dr Andrew Traill, head of air freight policy at the FTA, told SM he believes the investigation concerns surcharges for fuel and security. Many airlines appear to have increased surcharges by the same amount at around the same time.

Dr Traill added: "It might be that the airlines are all just copying each other. But there have been uncannily similar levels and similar implementation across the companies."

He said the increases, intended to be temporary, had been a consistent feature since 11 September 2001, and particularly over the past 18 months as a result of rising oil prices.

However, he said airlines operate different aircraft with varying fuel requirements, purchase fuel from different vendors and have their own price-hedging policies, so it was "strange" that surcharges have increased simultaneously.





SMmar2006

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