Cathay Pacific Airways Ltd said yesterday it had received a formal letter of complaint from European Union regulators investigating allegations of price fixing in the air cargo business.

 

The EU and the United States have been investigating more than a dozen airlines since at least early 2006 to discover if there was collusion in the air cargo industry to fix prices on surcharges for fuel, security and insurance.

 

The European Commission said on Friday it had sent out Statements of Objections to a number of airlines, but did not name them. British Airways, Air France-KLM, and Scandinavian airline operator SAS Group later confirmed they had each received a letter.

 

Cathay said it was reviewing the letter with its legal counsel and would make a "timely response" to the objections.

 

"It is a lengthy and complex document, and only sets out the (regulator's) preliminary findings resulting from its investigation into the air cargo sector of the aviation industry. The investigation involves many other airlines," the Hong Kong-based carrier said in a statement.

 

It did not say what the objections were, but emphasized that they were confined to air cargo operations and did not involve the company's passenger business.

 

"Cathay Pacific has always supported fair competition, and remains committed to compliance to all applicable competition laws in the 35 countries and territories in which it operates," the statement said.

 

Under EU law, the commission can fine companies accused of operating a cartel as much as 10 percent of their annual sales. Price-fixing, if proven, could also bring fines and other penalties in the United States.

 

(Shanghai Daily December 26, 2007)