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Regulators Launch Probe of Cargo Carriers

Feb 14, 2006 | AP

U.S. and European regulators have launched a probe of trans-Atlantic cargo carriers, examining possible price fixing in the air cargo industry.

The European Commission carried out surprise inspections Tuesday at several major Europeans airlines, while the U.S. Justice Department issued subpoenas.

British Airways, Air France, KLM, Lufthansa and Luxembourg's Cargolux Airlines all confirmed they were cooperating with authorities investigating the pricing practices in the industry.

The largest U.S. airline, AMR Corp.'s American Airlines, also said it has received a subpoena from the Justice Department as part of an investigation into practices in the air-cargo industry.

American was not been told it was a target of the investigation "and unlike some other airlines," didn't receive a search warrant, spokesman Tim Wagner said. He said the Fort Worth, Texas-based airline would cooperate fully with investigators.

United Airlines, a unit of UAL Corp., said its United Cargo office in Frankfurt, Germany received an inquiry from European authorities.

"We are giving the European authorities our full cooperation in this matter," spokesman Jeff Green said in an e-mail to The Associated Press. "United conducts its business in full compliance with European rules and regulations."

In Houston, a spokeswoman for Continental Airlines Inc. said that carrier had not received a subpoena.

Also Tuesday, Justice Department officials searched Japan Airlines' cargo offices at New York's JFK International Airport, airline spokesman Steve Pearlman said Wednesday in Tokyo. EU officials also searched JAL offices in Frankfurt.

In a brief statement to the London Stock Exchange, British Airways PLC said it had received a request for information from both the European Commission and the Department of Justice and was assisting in the probe.

Justice Department spokeswoman Gina Talamona said that U.S. investigators are working with the EU and other authorities to investigate possible "anti-competitive behavior."

Patrick Jeanne, a spokesman for cargo airline Cargolux Airlines International SA, said the carrier had been visited Tuesday by EU inspectors.

KLM spokesman Hugo Baas confirmed KLM is included in the probe and that investigators were at the company today. He said KLM is extending "full cooperation, and we have all the faith in the outcome of the investigation."

Lufthansa AG and Air France issued similar statements pledging cooperation. KLM and Air France are part of Air France-KLM Group.

The EC said surprise inspections are a preliminary step in investigations into suspected cartels.

"The fact that the European Commission carries out such inspections does not mean that the companies are guilty of anti-competitive behavior nor does it prejudge the outcome of the investigation itself," it said in a statement.

It provided no further detail of what was being examined and put no time frame on the completion of its investigation.

BA said its policy is "to conduct its business in full compliance with all the applicable competition laws."

The airline said it had no immediate comment beyond its statement.

LAN Cargo, the cargo division of Chile's flag airline LAN Chile, said Tuesday that U.S. government officials appeared at its Miami office as part of the probe.

The company said in a statement that "it is giving maximum cooperation to the authorities in charge of the investigation."