EC PROPOSES TO END AIRFREIGHT TARIFF CONSULTATIONS IN EUROPE

EC PROPOSES TO END AIRFREIGHT TARIFF CONSULTATIONS IN EUROPE    The European Commission has started formal proceedings against the International Air Transport Association that aim to end the airlines’ right to engage in tariff consultations on intra-European freight connections.
   In a significant ruling, the competition agency has sent a statement of objections to the International Air Transport Association. It said that it “has taken a preliminary view that the IATA cargo tariff consultations restrict competition and are no longer indispensable to provide customers with efficient interlining services.”
   Europe’s antitrust “block exemption” for cargo tariff consultations among airlines, Commission Regulation No. 1617/93, was officially ended in June 1997, but it was effectively replaced by a comparable system introduced by IATA under an individual exemption.
   The EC said that the exemption “effectively enabled European airlines to agree on tariffs for the carriage of freight.”
   “According to IATA, the tariff conference system facilitates cargo interlining,” a spokesman for the EC said, referring to the carriage of freight by several airlines. “The cargo tariffs fixed by the tariff conferences are then used to calculate the participating carrier’s compensation,” the EC added.
   “The tariff conference system is 55 years old and dates from the time air transport markets were strictly regulated,” the Brussels competition body said.
   The European Shippers’ Council, which has long called for the end of interlining tariffs, welcomed the EC move. “They are challenging the interlining practice,” said ESC secretary-general Chris Welsh.
   Cargo consultations are not permitted in the U.S.
   A spokesman for IATA was not immediately available to comment on the EC proceedings.