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Last Updated: Tuesday, 14 February 2006, 21:13 GMT
EU-US cartel probe hits airlines
British Airways aeroplanes' tailfins
British Airways is one of a number of firms under investigation
A number of airlines including British Airways are being investigated as part of a European and US cartel probe.

Investigators launched dawn raids, and British Airways said the European Commission and the US Department of Justice had asked it for information.

Other firms targeted include Germany's Lufthansa, Scandinavian airline group SAS, Air France KLM, and Cargolux.

The probe has come at a tricky time for many airlines as they battle high fuel costs and lower-priced competitors.

Consequences

For British Airways the investigation comes as the airline's new chief executive Willie Walsh said he wants to concentrate on the firm's pension problems, its move to the new Terminal 5 at Heathrow, and cost cutting.

Analysts said that a trans-Atlantic probe can prove costly and distracting, even if a company is not guilty of any wrongdoing.

Should a firm be found guilty of anti-competitive and cartel behaviour then the EC can levy a fine of up to 10% of its annual sales.

British Airways' policy is to conduct its business in full compliance with all the applicable competition laws
British Airways

Previous fines against drugmaker Roche and Microsoft have run into the hundreds of millions of euros.

In the US, cartel behaviour can lead to prison sentences.

The US Department of Justice said its anti-trust division was co-ordinating its investigation into anti-competitive practices in the air cargo industry with the EU and other foreign authorities.

More companies are reported to have been caught up in the investigation, but their involvement has not yet been confirmed.

'Not pre-judge'

EC competition spokesman Jonathan Todd said the early morning raids were carried out because of concerns that "the companies concerned may have violated rules on cartels and restricted business practices".

Competition officials from each of the countries concerned had accompanied the EC's investigators, Mr Todd said.

However, Mr Todd was keen to point out that even though a probe had started, it did not mean that "the companies are necessarily guilty of anti-competitive behaviour and it does not pre-judge the outcome of our investigations".

British Airways confirmed that it was one of the companies which had been raided, and said it would assist the EC and the DoJ in their investigation.

"British Airways' policy is to conduct its business in full compliance with all the applicable competition laws," it said in a statement.

Lufthansa said: "The cartel authorities are investigating possible cartel activity in the area of air cargo. Lufthansa will fully support the investigations."

A spokesman for SAS said that: "We don't feel there is any reason for concern, but this will have to be verified."


SEE ALSO:
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