BA bombarded with lawsuits over claims of price-fixing for cargo

British carrier among the airline giants sued amid allegations of a 'global conspiracy' to overcharge customers
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The Independent Online

British Airways is facing at least 15 class-action lawsuits in the US over allegations that it conspired with rival airlines to fix cargo prices.

The suits pile further pressure on BA, which admitted last month that it had been raided by cartel-busting officers from the US Department of Justice and the European Union.

The EU alone can impose fines of up to 10 per cent of company turnover, and attorneys in the US are seeking millions of dollars on behalf of companies which used BA and its rivals to ship goods to and from the US.

Cargo users claim they have been overcharged for six years because airlines conspired to impose and raise fuel and security surcharges in "lock-step" with each other.

The litigation is a new financial burden for Willie Walsh, BA's chief executive, as he strives to bring down costs and cut up to 6,000 jobs across the company. BA says it is aware of the lawsuits and that it does not breach competition rules.

One law firm is set to travel to the UK and continental Europe in the next few weeks to recruit other BA customers to its class action. It is already assessing the claims of "several dozen" US cargo users for inclusion in the suit.

Michael Hausfeld, of the Washington firm Cohen Milstein Hausfeld & Toll, said: "A number of overseas companies have approached us, including some from the UK, and we will be travelling to meet them."

A total of 15 suits have been filed in district courts around the US, with plaintiffs ranging from a New York perfume ingredients company to an Atlanta pet supplier. All the suits name BA, and other major airlines raided earlier this month.

Officers from the Department of Justice entered BA's office in Queens, New York, on Valentine's Day, and a similar raid took place at its Heathrow base.

Other airlines to have admitted being drawn into the investigation include Air France-KLM and Lufthansa from Europe, and United and American Airlines in the US. Virgin Atlantic also said it had received a request for information.

The suits variously allege the airlines were involved in a "global conspiracy" to fix fuel and security surcharges and that they "used the aftermath of the 9/11 attacks as a pretext for co-ordinated price increases".

Last week, Lufthansa said it would assist federal prosecutors in their investigation, in a move that was interpreted as a breakthrough and that might shield it from criminal charges if it provides evidence against other carriers. A federal grand Jury has been set up to examine the issue.

A lawsuit on behalf of Niagara Frontier Distribution, an airfreight shipper, sites Lufthansa's "air cargo fuel index", updated daily on its website, as one of the ways in which airlines shared information about upcoming increases in fuel surcharges. Lufthansa also "led the way" in pre-announcing other surcharges.

Niagara Frontier alleges that the airlines searched for other ways to co-ordinate surcharge rises after being prevented from organising an industry-wide scheme through the Intern- ational Air Transport Association, which is also named in the lawsuit.

BA last week set out £450m of cost cuts, which analysts believe will see the airline reduce its employee numbers by between 2,000 and 6,000 from 48,000. It needs to conserve cash to pay for any restructuring, to upgrade passenger facilities and buy new planes. It is also promising to unveil plans to tackle its £2bn pension fund deficit at the end of this month.

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