EC launches new airline cartel probe

Air France-KLM, Alitalia and Lufthansa are under investigation for potential price-fixing on Japan routes

Airlines have once again found themselves at the centre of a cartel investigation, with European Commission officials having raided the offices of Air France-KLM, Alitalia and Lufthansa on 11 March. The EC carried out "unannounced inspections" on the premises of what it said at the time were international passenger carriers that provide services on long-haul routes between Europe and a third country.

Lufthansa has since issued a statement admitting that it is one of those carriers and that the investigation is focused on "anti-competitive price-fixing and collusive behaviour in traffic between the European Union and Japan". Air France-KLM and Alitalia have also admitted that they are being investigated. The carriers all say they are co-operating fully with the probe. Lufthansa chief executive Wolfgang Mayrhuber says the German ­carrier "wouldn't tolerate any ­irregularities", and the probe "does not mean that any ­irregularities have taken place".

Mike Pullen, head of EU/competition law at DLA Piper, says cartel investigations require "lots of resources and lots of planning" and are carried out either when there is a "reasonable suspicion" or a whistle blower. "I find it ­surprising that major airlines with large legal departments are finding themselves in this ­position," says Pullen.

These raids are the latest in a string of probes targeting the airline industry. Two years ago airline offices around the world were raided as part of a cargo price-fixing investigation. Criminal proceedings are still ongoing and as leniency applications come in, it could be that information relating to other cartel ­activity is now coming to light.

Source: Airline Business