Cargo Price Investigation Takes on Global Scope

By From news reports

U.S. and European Union investigators looking into possible illegal price fixing in the air cargo business have cast a wide net in an inquiry that takes in more than a dozen airlines from Canada to Asia, government officials and airline executives said Wednesday.

Officials of the European Commission and the U.S. Department of Justice have provided few details about the investigation or of the searches of airlines’ offices that were carried out on Tuesday. However, one of the targets, SAS Cargo in Copenhagen, said the EU had alleged that cooperation among airlines began in 2000 and involved agreements about surcharges imposed by airlines to offset certain external costs. Among the costs, SAS said, are surcharges on fuel, added security after the September 2001 terrorist attacks and premiums for war-risk insurance after the start of the war in Iraq. SAS said it did not suspect any violations at its operations. Tuesday’s raids involved only possible price fixing in air cargo, a European Commission spokesman, Jonathan Todd, said Wednesday in Brussels. When asked if there was also an investigation into possible collusion in setting fuel surcharges for passenger flights, he said: “I cannot make any comment on any other investigation that may or may not be going on.

The commission has said that the raids were a preliminary step in investigations into suspected cartels and it does not mean the companies raided are guilty of anti-competitive behavior. UPS, the U.S. shipping company, has been “informally contacted” by the Justice Department regarding the investigation, said a company spokesman, Norm Black. “UPS understands it is not part of the probe,” Black said. American Airlines, the largest U.S. carrier, said that it had received a subpoena from the Justice Department but had not been told that it was a target of the investigation, said a spokesman, Tim Wagner.

United Airlines’ Frankfurt office was searched by EU officials, said a United spokesman, Jeff Green. He said other air freight carriers in Frankfurt had received similar visits.

In Chicago, an FBI spokesman, Ross Rice, confirmed that the FBI had searched the Air France-KLM cargo terminal at O’Hare International airport as part of a continuing investigation.