- The Washington Times - Wednesday, February 15, 2006


More than a dozen airlines have been drawn into a widening investigation by United States and European Union officials into whether there has been collusion in the air cargo industry to fix prices on surcharges for fuel, security and insurance.

Representatives for the European Commission, the U.S. Department of Justice and the FBI refused yesterday to provide details about the probe.

But one of the foreign airlines targeted, SAS Cargo in Copenhagen, said the EU thinks that cooperation among airlines began in 2000 and involved agreements about surcharges imposed by airlines to offset certain external costs.

Among the costs, according to a statement from SAS, are surcharges on fuel, added security after the September 11, 2001, attacks in the U.S. and premiums for war-risk insurance after the start of the war in Iraq. SAS said it does not suspect any violations at its operations.

Raids were conducted at the offices of several airlines Tuesday, and yesterday several more cargo carriers said they had been contacted or had been issued subpoenas from authorities.

In Washington, FBI spokesman Bill Carter said records in the case have been sealed, and he referred further questions to Justice Department spokeswoman Gina Talamona, who would say only that the investigation is continuing. She declined further comment.

EU antitrust spokesman Jonathan Todd in Brussels, when asked if there was also an investigation into collusion in setting fuel surcharges for passenger flights, said: “I cannot make any comment on any other investigation that may or may not be going on. At any one time, the commission has several hundreds of antitrust investigations going on, of which only a small proportion are in the public domain.”

The commission said Tuesday that the raids were a preliminary step in investigations into suspected cartels and that it does not mean that the companies raided are guilty of anti-competitive behavior.

Under EU law, the commission can fine companies accused of operating a cartel as much as 10 percent of their annual sales. Price fixing, if proven, also could bring fines and other penalties in the U.S.

Atlanta shipping giant UPS Inc. has been “informally contacted” by the Justice Department regarding the probe, company spokesman Norm Black said yesterday.

“UPS understands it is not part of the probe,” Mr. Black said, adding that the company was not searched or subpoenaed.

The largest U.S. airline, AMR Corp.’s American Airlines, said it received a subpoena from the Justice Department but had not been told that it was a target of the investigation, spokesman Tim Wagner said. “And, unlike some other airlines,” he said, American did not receive a search warrant. He said the airline would cooperate fully with investigators.

UAL Corp.’s United Airlines had its Frankfurt, Germany, office searched by EU officials, according to United spokesman Jeff Green. He said other air freight carriers in Frankfurt also were visited.

Among the other airlines that were searched or approached by investigators were Atlas Air Worldwide Holding Inc.’s Polar Air Cargo unit, Japan Airlines Corp., Hong Kong’s Cathay Pacific Airways Ltd., British Airways PLC, Germany’s Lufthansa AG, Luxembourg’s Cargolux Airlines and Lan Chile.

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