IATA GIVES UP JOINT RATE-SETTING FOR INTRA-EUROPEAN FREIGHT

IATA GIVES UP JOINT RATE-SETTING FOR INTRA-EUROPEAN FREIGHT    The International Air Transport Association has agreed to stop setting rates jointly for the air transportation of freight within Europe, a practice that it had used for 55 years in Europe.
   The decision by the association of airlines follows competition proceedings started by the European Commission in May this year.
   IATA has agreed to end the joint setting of cargo rates within Europe from the beginning of 2002, when rates will be fixed individually by each carrier.
   The EC said that it welcomes this decision. It will “translate into greater competition in the setting of air cargo shipment rates to the benefit of European exporters and the European economy as a whole,” the EC said.
   Until June 1997, the activities of the IATA tariff conferences for freight shipment within the European Economic Area were block-exempted under Commission Regulation No. 1617/93. The Commission abolished the block exemption in 1997 on the grounds that conference tariffs were considerably higher than market prices and that price consultations no longer appeared justified.
   But following the withdrawal of the block exemption, IATA applied for an individual exemption, arguing that tariff conferences facilitated cargo interlining. Interlining occurs when cargo is carried for part or all of the journey by an airline other than the airline which sold the ticket. The cargo tariffs fixed by the tariff conferences are then used to calculate each carrier’s compensation.