Sunday 23rd Oct 2016 - Logistics Manager

BA raided in cartel probe

The offices of British Airways and a number of other leading air-cargo companies, have been raided by European and US anti-trust officials, as part of a coordinated investigation into alleged cargo price-fixing.

EU investigators arrived at BA’s cargo headquarters near Heathrow, at 9am on Tuesday. Five hours later, their counterparts from the US Department of Justice mounted a similar operation at La Guardia airport in New York. A number of other cargo headquarters have also been raided.

Airline officials said that the investigation focused on the way the industry made surcharges for items such as fuel and security, a process that some shippers said lacked transparency.

The European Commission said its officials had “carried out unannounced inspections at the premises of several air cargo carriers in several EU member states”. The raids follow allegations that the airlines may have violated Article 81 of the EC treaty which outlaws cartels, price fixing and market sharing. A spokesperson from the American Justice Department said: “I can confirm that the anti-trust division is investigating the possibility of anti-competitive practices in the air cargo industry.”

The European Commission does not reveal the names of the companies it has targeted but several groups said that they were under investigation or had received “requests for information.”

The head of Air Freight Policy for the Freight Transport Association , Dr Andrew Traill said: “Shippers have long since identified and been concerned by the application of very similar levels of surcharges applied by different airlines, in respect of fuel price increases, new security measures and other factors.

‘As such FTA welcomes the joint EU-US cartel probe on airlines and very much hopes that the investigation will be able to give the industry a clean bill of health. Shippers are entitled to expect to operate in an environment of keen commercial competition regarding both cost and service and events in the recent past have created doubts in confidence.

‘We look forward to the conclusions of this work with great interest’.

In an update: It has become apparent that the probe has spread to Asian cargo businesses, with investigators raiding the premises of leading carriers in Japan, South Korea and Hong Kong.