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Tribunal to probe air cargo cases

Jul 29 2010 14:44

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Comair: No price collusion


Johannesburg - The Competition Commission has referred cases of collusion in the cargo carriage market against eight airline firms to the Competition Tribunal for adjudication.

Airlines allegedly involved in the price fixing conduct include British Airways, South African Airways Cargo, Air France Cargo-KLM Cargo, Alitalia Cargo, Cargolux International SA, Singapore Airlines, Martinair Cargo and Lufthansa Cargo.

The airlines face allegations of fixing the price of the fuel surcharges and cargo rates on cargo flown into and out of South Africa.

The commission initiated the investigation on March 27 2006, following an application for leniency by Lufthansa. In its application Lufthansa admitted that various surcharges and price increases were agreed upon with its competitors.

It was granted conditional immunity from prosecution, provided it cooperates with the commission in its investigation and prosecution.

During the investigation the commission found that the conduct started in 1996, when the price of jet fuel went up. As a consequence, the respondents - in their capacity as members of the International Air Transport Association (Iata) - adopted a resolution in terms of which a fuel surcharge mechanism was introduced.  

The resolution entailed a mechanism through which carriers would decide on the timing and the amount of the fuel surcharge on cargo.  

Evidence before the commission indicates that this conduct continued until 2006.

Furthermore, Lufthansa, Cargolux, Air France, and KLM face allegations of fixing cargo rates. The airlines identified routes and concluded agreements to implement increases in cargo rates on those routes. This was done through meetings and workshops facilitated by the three airlines.

The commission has asked the tribunal to impose an administrative penalty of 10% of annual turnover on each of the airlines involved, except Lufthansa which was granted conditional immunity from prosecution by the commission provided that it fully cooperates in the commission's investigation and prosecution.

Charges set by airlines

The International Air Transport Association (Iata) said on Thursday it has never operated never operated a mechanism for determining fuel surcharges.
Iata's director of corporate communications, Anthony Condl, also stated that Iata has absolutely no involvement in the setting of fuel surcharges.

Fuel charges are set by airlines themselves, he asserted.

- I-Net Bridge


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