SA Competition Commission refers air cargo cases for prosecution

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

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

The Commission initiated this investigation in March 2006, following an application for leniency by Lufthansa, wherein Lufthansa admitted that various surcharges and price increases had been agreed with its competitors and it was granted conditional immunity from prosecution provided it cooperated with the Commission in its investigation and prosecution.

During the investigation, the Commission found that the price fixing activities began in 1996, when there was an increase in the price of jet fuel.

In response to this, 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 these activities continued for ten years.

Furthermore, Lufthansa, Cargolux, Air France, and KLM face allegations of fixing cargo rates.

These airliners 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 airliners involved, except Lufthansa – which was granted conditional immunity from prosecution by the Commission subject to its full co-operation in the Commission’s investigation and prosecution of this case.

IATA responded to the Commission’s statement, poining out that its statement is incorrect:

• IATA has never operated a mechanism for determining fuel surcharges.
• IATA has absolutely no involvement in the setting of fuel surcharges. Fuel surcharges are set by airlines.
• IATA has consistently advised its member airlines that fuel surcharges must be determined by each airline individually in the unilateral exercise of its business judgment and in compliance will all relevant laws.
• That the airlines involved in the Competition Commission’s inquiry are members of IATA does not and should not imply any IATA involvement.
• Neither IATA nor any of its officers or employees were implicated in the coordinated worldwide investigation of cargo surcharge price coordination.

Quelle: eyefortransport
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