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EU regulators raid airlines in antitrust probe

13 March 2008, 00:08 CET

(BRUSSELS) - European Commission regulators raided international airlines Tuesday on suspicion that the carriers may have operated an illegal cartel on long-haul passenger flights.

Although the commission did not name the targetted airlines, Germany's Lufthansa acknowledged that it had received EU inspectors and said that the investigation covered carriers operating between Europe and Japan.

Dutch carrier KLM later said that it too was among companies concerned by the probe.

If the commission decides to bring cartel charges against the airlines, they face the threat of being saddled with hefty fines.

"Commission officials carried out unannounced inspections at the premises of a number of international airline passenger carriers," Europe's top antitrust watchdog said in a statement.

"The commission has reason to believe that the companies concerned may have violated (EU) rules on restrictive business practices," it added.

In addition to not naming the targeted companies, the commission also did not say how many companies were involved, saying that the investigation covered airlines flying long-haul routes between Europe and an unnamed third country.

From Frankfurt, Lufthansa said EU investigators had visited the carrier in connection with allegations of price fixing.

"The commission has information that passenger aviation companies including Lufthansa in Europe and in Japan may have taken part in anti-competitive price-fixing and collusive behaviour in traffic between the EU and Japan," the German airline said in a statement.

"Lufthansa is cooperating with the European Commission in full and willingly providing all the requested information," it added.

The commission has a clemency programme in cartel cases that absolves companies from all or part of potential fines if they blow the whistle on a cartel they have participated in.

An Air France-KLM spokeswoman in Paris declined to comment on whether the airline had or had not received EU regulators in the raids, but KLM said in Amsterdam that it was among the companies involved in the probe.

"The airline is fully cooperating with the inquiry," the company said, adding that the probe focused on service to two Japanese destinations, Osaka and Tokyo's Narita airport.

The commission said that such surprise inspections were the first step in cartel investigations and did not necessarily mean that targeted companies were guilty.

EU Competition Commissioner Neelie Kroes has made cracking down on cartels a priority and has levelled billions of euros in fines against such illegal clubs in recent years.

In December, EU antitrust regulators already lodged formal cartel charges against several air freight companies, taking the first step in legal action that could lead to hefty fines.

In that separate case, the commission did not name the targeted companies, but Air France-KLM, Lufthansa, Japan Airlines and Scandinavian carrier SAS acknowledged that they had received formal charge-sheets.

SAS, Finnish airline Finnair, Iberia of Spain and Swiss carrier Swiss, which is controlled by Lufthansa, said they had not received visits by EU inspectors in Tuesday's action.

Text and Picture Copyright 2008 AFP. All other Copyright 2008 EUbusiness Ltd. All rights reserved. This material is intended solely for personal use. Any other reproduction, publication or redistribution of this material without the written agreement of the copyright owner is strictly forbidden and any breach of copyright will be considered actionable.




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