Firms Sue Against Air Cargo Carriers

Companies that use air cargo to transport goods have filed lawsuits in federal court, alleging that some of the world's largest airlines -- including American and United -- have conspired since January 2000 to fix prices.


Feb. 22--Companies that use air cargo to transport goods have filed lawsuits in federal court in Brooklyn, alleging that some of the world's largest airlines -- including American and United -- have conspired since January 2000 to fix prices and used the Sept. 11 terrorist attacks as a "pretext" for raising prices.

In two suits filed in U.S. District Court last week, law firms for the companies alleged that major U.S., European and Asian airlines coordinated prices by raising surcharges for fuel and security. Lawyers were unable yesterday to say how much extra the companies have been charged. Both suits seek class-action status.

The suits -- one filed on behalf of a Middletown, N.Y., supplier of ingredients for flavors and fragrances, and the other an animal shipping company in Atlanta -- came a week after the Justice Department and European law-enforcement authorities launched investigations into possible air-cargo price-fixing.

The U.S. and European investigators also handed out subpoenas to some airlines, including American, and inspected cargo operations at Kennedy Airport and other locations.

American, the world's largest airline, acknowledged receiving a subpoena, but added that it has "not been notified that it is a target of the investigation and, unlike some other airlines, has not received a search warrant." United declined to comment yesterday on the pending lawsuits and said it is cooperating with the investigations.

Barbara J. Hart, an attorney at Labaton Sucharow & Rudoff in Manhattan, which represents Fleurchem Inc. of Middletown, said yesterday that executives at the company "noticed similarities in surcharges by the various carriers." Hart said the company believed it has been "victimized" by a price-fixing conspiracy.

Fleurchem's suit said the airlines began conspiring "on or around" Jan. 1, 2000.

Garrett Blanchfield, a lawyer for Reinhardt Wendorf and Blanchfield of St. Paul, Minn., which represents pet transporter Animal Land Inc., said it was "way too early" to talk about how much the company may have been overcharged. Blanchfield said he expects other companies to join the lawsuit. "A suit like this has more than a dozen defendants and covers years of time," Blanchfield said.

The suit filed for Animal Land alleges that the airlines "used the aftermath of the 9/11 attacks ... as a pretext for coordinated price increases in the form of surcharges for additional security measures."

Tim Sailor, from Navigo Consulting Group, a freight shippers advisory firm in Long Beach, Calif., said similar investigations have cropped up before. But, he added: "The scope of this one is probably a little broader than in the past because it involves so many carriers."

A Justice Department spokeswoman yesterday confirmed that U.S. and European authorities have coordinated an investigation into "the possibility of anti-competitive practices in the air cargo business."

The suit filed on behalf of Fleurchem named British Airways, Air France-KLM, Lufthansa, Japan Airlines Corp., Korean Air Co., Asiana Airlines Inc., Cathay Pacific Airways, United Airlines Inc. and Scandinavian Airlines System. The suit filed for Animal Land names the same airlines and adds Air Canada, Atlas Air Worldwide Holdings Inc., Polar Air Cargo Inc., American Airlines Inc., Cargolux Airlines International, Royal Dutch Airlines, All Nippon Airways Co. and Nippon Cargo Airlines, LAN Airlines and Singapore Airlines.

Representatives for the airlines either could not be reached or did not return phone calls.

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