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Lufthansa, Deutsche Bahn settle air cargo dispute

The European Commission alleges that a price-fixing cartel in operation from 1999 to 2006 set the levels of fuel and security surcharges.

Lufthansa and Deutsche Bahn have reached a settlement agreement. (Photo: Lufthansa)

German flag carrier Lufthansa and German national railway Deutsche Bahn have reached agreement on a long-festering dispute concerning an air cargo cartel.

The settlement was announced Aug. 26, although details are being kept confidential by mutual agreement.

The settlement ends a dispute before the Cologne regional court that has been ongoing since 2013.

Settling parties are DB Barnsdale, a wholly owned subsidiary of Deutsche Bahn, and Lufthansa Group member companies Lufthansa Cargo, Swiss International Air Lines and Deutsche Lufthansa.

In 2010, the European Commission and other antitrust authorities imposed fines totaling almost €800 million ($887 million) against 11 air cargo carriers: Air Canada, Air France-KLM, British Airways, Cathay Pacific, Cargolux, Japan Airlines, LAN Chile, Martinair, SAS, Singapore Airlines and Qantas.

The European Commission alleges that a price-fixing cartel in operation from late 1999 to early 2006 set the levels of fuel and security surcharges.

That allegation spurred DB Barnsdale to pursue damage claims on behalf of DB Schenker, a division of Deutsche Bahn that focuses on logistics, as well as several freight forwarders and shippers that assigned their claims to the company.

In 2013, the company filed an action for damages in the Cologne court against the air cargo carriers involved in the cartel.

Prior to agreeing to the Lufthansa settlement, DB Barnsdale already had reached settlement with Air France-KLM, Qantas, SAS and Singapore Airlines.

Six defendants still remain in proceedings before the Cologne court: Air Canada, British Airways, Cargolux, Cathay Pacific, Japan Airlines and LAN Chile/LATAM.

In 2012, LAN Airlines and that carrier’s subsidiaries in Peru, Argentina, Colombia and Ecuador, LAN CARGO and subsidiaries, and TAM Linhas Aereas and that carrier’s business units TAM Transportes Aereos del Mercosur and loyalty program Multiplus merged to form LATAM Airlines Group, adopting the single brand. LATAM.

Martinair, previously owned 50/50 by KLM and sea and land transport giant Maersk, now is part of Air France-KLM Group.