Press release

The European Shippers’ Council has this week joined the class action in the ongoing “Air Freight Shipping Cartel Litigation” (the ‘Air Cargo’ action). The class action was started some two years ago in the US by a number of air freight customers against a group of flagship airlines for violation of the US and EU Competition laws. The complaint alleged that those airlines have conspired to fix prices on costs associated with air freight across the world.

If the action is successful it would allow buyers of airfreight services (shippers) to recover compensation from the airline cartel. ESC has decided to join the class action in order to help those European shippers that believe they have a valid claim against the airlines that have allegedly or already proven to have participated in the price fixing activities.

Commenting on the recent decision to join the Class Action ESC Secretary General Nicolette van der Jagt said: “The effect of the surcharges illegally agreed and set by some airlines has been to artificially inflate cargo shipment prices to the benefit of those cartel members and to the detriment of the customer which is in clear violation of the law. Many European shippers who believe they have directly or indirectly paid the charges illegally fixed by the airlines have a legitimate right to seek compensation.”

“We believe we have an obligation to represent the interest of European shippers who have not yet joined the class action individually or through other representatives in the class action. We will be communicating to shippers via their representative shippers’ councils if they wish to make a claim and to submit their evidence to us in strictest confidence. ESC will then make this evidence available to the legal counsel handling the case in order to assist the court in determining the appropriate scale and level of damages to be awarded, or alternatively that might be required in any potential out of court settlement by those airlines on which the court has not yet ruled.”

Class action proceedings in the United States began early 2006 against airlines who are alleged to have begun price fixing as early as 2000, with the fuel surcharge and after 11 September 2001 with the Security Surcharges, and later still with the War Risk Surcharge. The cartel member carriers charged their customers’ surcharges calculated in nearly identical ways, thus eliminating competition between them.

Lufthansa has filed for amnesty in the US class actions. It has agreed an $85 million settlement with the US authorities to cover claims made against it. It was reported this week that Cargolux has made a $154.9m provision against potential fines arising from its alleged involvement in a price-fixing. British Airways Plc pleaded guilty and was sentenced to pay a $300 million; Korean Air Lines pleaded guilty and was sentenced to pay a $300 million criminal fine; Qantas Airways Limited pleaded guilty and was sentenced to pay a $61 million criminal fine. Investigations continue in respect of an un-disclosed number of other airlines.

The European Commission has also started its investigations into the alleged air carriers’ cooperation. The investigation is still ongoing. The question of how far the US class action will provide redress for ESC members who have bought air cargo services in Europe is currently being considered by the Courts in the United States.

For further information contact: Nicolette van der Jagt, Secretary General of the ESC - Brussels 00 322 230 2113