Air Canada included in EU air cargo cartel probe

Mon Dec 24, 2007 3:15pm EST
 
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TORONTO (Reuters) - Air Canada ACa.TO has been included in the European Commission's investigation into price fixing on freight services, the airline said on Monday, adding that it might suffer a liability as a result.

"It is not possible at this time to predict with any degree of certainty the outcome of these proceedings but, as previously disclosed, these proceedings may result in liability to Air Canada, which may be material," the airline said.

Air Canada, Canada's biggest airline, said it is cooperating with investigators.

It said it had received an official charge sheet, known as a statement of objection, which sets out the commission's preliminary assessment in its investigation into alleged anti-competitive cargo pricing activities.

The alleged activities include the levying of certain fuel surcharges by a number of airlines and cargo operators in breach of EC antitrust laws.

"It is Air Canada's policy to conduct its business in full compliance with all applicable laws in all of the jurisdictions in which it does business, including all applicable competition or antitrust laws," Air Canada said in a statement.

The EC, the European Union's top anti-trust watchdog, last week charged several airlines, including British Airways BAY.L, Lufthansa (LHAG.DE: Quote) and SAS (SAS.ST: Quote), for fixing freight service prices. Earlier on Monday, Cathay Pacific (0293.HK: Quote) said it too had received a statement of objections from the commission.

The moves followed raids on both sides of the Atlantic in February of last year. The U.S. Justice Department is also investigating several airlines. Air Canada said it was not raided.

It said it is studying the statement of objections and will respond in writing in accordance with normal procedure.

Companies typically have up to two months to respond to a statement of objections.

(Reporting by John McCrank; Editing by Peter Galloway)

 
<p>An Air Canada plane prepares for take-off at Montreal's Dorval Airport, April 1, 2003. Air Canada has been included in the European Commission's investigation into price fixing on freight services, the airline said on Monday, adding that it might suffer a liability as a result. REUTERS/Christinne Muschi</p>