Fresh EU probe into airline price-fixing

2008-3-13

The European Union anti-trust regulator has started a new probe into possible price-fixing by international airlines, including Lufthansa and KLM, this time looking at routes between the EU and Japan.

Lufthansa said the European Commission has information that European and Japanese passenger airlines, including Lufthansa, "may have taken part in anti-competitive price-fixing and collusive behaviour in traffic between the EU and Japan."

It said its offices have been searched by anti-trust officials and it is cooperating with the commission in full and will provide all the requested information.

Dutch airline KLM, part of Air France-KLM, the world's biggest airline by revenue, also said it was involved in the probe and is cooperating with the EU.

In Tokyo, spokesmen at Japan's two biggest international carriers by revenue, Japan Airlines and All Nippon Airways, said they hadn't been informed of any ongoing investigation by EU anti-trust officials. The spokesmen said they learned of the probe through media reports, and said the airlines' offices haven't been inspected by EU officials.

The EU said that it had raided the offices of a number of international airlines in an investigation into suspected price-fixing on long-haul routes between Europe and a third country. The surprise inspections were conducted in alliance with national anti-trust bodies.

The EU commission can penalise companies as much as 10 percent of their annual global sales if they find evidence of price fixing, but, in practice, penalties typically have fallen far short of that amount.

British Airways, Virgin Atlantic Airways and Nordic airlines SAS and Finnair said they weren't part of the probe.

The new probe extends recent EU anti-trust moves against airlines for apparently colluding on ticket prices, fuel duties and cargo.

Last month, British Airways and Virgin Atlantic agreed to settle a pending class-action lawsuit brought on behalf of US and UK passengers who may have been overcharged due to alleged price fixing. Last year, BA was fined about US$527 million by US and UK regulators for colluding with competitors, including Virgin Atlantic, to fix the prices on certain flights. The company, which still faces a legal probe by the European Commission, has taken a $703.34 million provision to settle all claims.

In December, the EU said it had charged several companies in connection with an alleged air cargo cartel. British Airways, SAS, and Japan Airlines confirmed that they had received the formal charges and would study them.

The EU, again with the US Department of Justice, investigated whether air cargo companies colluded to fix prices from 2000.

Surprise inspections are a preliminary step in investigations into suspected cartels. The length of the investigation will depend on the complexity of the case and the cooperation of the companies concerned, it added.
Source: cargonewsasia
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