Anti-trust laws are supposed toprevent customers from being manipulatedby collaboration betweensuppliers, but in the airline industry itschief effect seems to be creating a wallof silence on important topics.
Such at least seems to be the experienceof FAGSA, the Federation ofGeneral Sales Agents, which has seen itsefforts on the topic of bank guaranteesand commission on surcharges, blockedby airline fears of anti-trust prosecution,following the high profile investigationsby the EU and US authorities launchedin February 2006.
Last May, for example, it got agreementunder IATA’s European Air CargoProgramme that GSAs that settledthrough CASS would not need to putup bank guarantees. It was hoping toextend this worldwide by amendingIATA resolution 871 at the IATA CargoTariff meeting in Kuala Lumpur lastNovember.
But that meeting was cancelled dueto airline fears about being prosecutedfor price fixing, and so Glen Shires,FAGSA general secretary, is now pinninghis hopes on the IATA meetingin Mexico on 6-8 March.
"We have an IATA lawyer from Montrealthat has said the change would beeasy to make, but it remains to be seenwhat happens," he says. "The industrywould benefit a lot if we could get thismeasure through. At the moment, byhaving to go to finance companies forguarantees, GSAs are paying a lot of money in interest that is going out of the industry. We are saying: Let’s keep this money within the industry."
In return, FAGSA has undertakento push the virtues of CASS amongits members and other GSAs. "It is asuperb system, which is 99.98 percentreliable, with a tiny amount of errorand even smaller levels of default. Italso means that accurate statistics canbe gathered earlier," says Shires.
On the subject of persuading airlinesto pay commission to GSAs on fueland security surcharges issue, FAGSAhas also found carriers unwilling totalk, even individually, with anti-trustconcerns again being cited.
FAGSA’s patience on the subjectseems to be wearing thin. "We havebriefed legal counsel and court actioncould be imminent," Shires says.
"But we don’t want to go down this route. We would like to reach a settlementon behalf of our members. Thatsettlement does not have to include GSAs being paid all the back commission owing to them, but it should be realistic."
Currently the organisation is givingsupport to court cases by Italianand Austrian forwarders on this issue,though it is not participating in thecases directly. It is also in talks withthe European Commission, thoughShires stresses strongly that FAGSA hasNOT raised a formal complaint on thesubject, despite pressure to do so fromsome quarters.
"Our view is that this would not bethe way to clean up our own backyard,"he says. "We want carriers to thinkabout what is right.
Every case that has been taken against carriers on commission on passenger surcharges, they have lost, and they will lose too on the cargo side, if it comes to court."
"What we are proposing is that thesurcharges are moved from the taxesto the rates box on the air waybill, sothat they at least are seen as beingpotentially commissionable. Airlinesand GSAs can then discuss the issue among themselves."
As it is, airlines are behaving "likesomeone hiding a card in a pokergame", Shires says. "If you do that, and you get caught, you know what happens. And it is inevitable that airlines will get caught. Sooner or later some competition authority is going to look at this, see that all the airlines are doing the same thing, and crack down."
¨C Peter Conway
