Deutsche Bahn's logistics unit sues multiple airlines in cargo price-fixing scandal

The logistics unit of German railway company Deutsche Bahn AG said today it is suing 13 airlines operating worldwide cargo services for their roles in conspiring to set fuel and security prices between late 1999 and 2006.

The unit, Schenker AG, filed suits in courts in Cologne, Germany, and New York seeking $2.5 billion in damages from the carriers, according to Deutsche Bahn. The German suit claims $2.25 billion in damages, the company said. In the U.S. suit, Schenker said it would seek approximately $370 million in damages. The U.S. portion could increase to $1.1 billion if the courts award treble damages for violating federal antitrust laws, Deutsche Bahn said.

The German lawsuit, filed in December 2013, alleged that Lufthansa, British Airways, Singapore Airlines, Swiss Airlines, Cargolux International Airlines, SAS, Air Canada, Cathay Pacific Airways, Japan Airlines, LAN Airlines, and Qantas Airways, coordinated fuel and cargo security surcharge pricing strategy on shipments to and from worldwide points. This past August, Schenker brought suit in New York against Air France, KLM, Dutch carrier Martinair, Cargolux, Qantas, SAS, and All Nippon Airways, alleging the airlines engaged in the same practices on flights to, from, and within the United States.

The case made headlines in February 2006 when the Department of Justice, the European Commission, and other global antitrust authorities raided offices of multiple airlines seeking evidence they conspired to coordinate pricing on fuel and security surcharges imposed on cargo services. U.S. and European regulators would eventually levy nearly $3 billion in fines against airlines charged in the scheme, and several air cargo executives went to prison for their roles in it.

Several carriers in the U.S. settled with class action plaintiffs and individual claimants in order to avoid protracted civil lawsuits. Schenker agreed to settle with some carriers. However, it chose not to participate in the class action lawsuits with the airlines named in today's legal action, it said. "We preferred to keep our powder dry," said Gerd Becht, Deutsche Bahn's general counsel, in a phone interview today.

Becht said to date Deutsche Bahn has received "only a tiny fraction" in settlement compensation of what it believes it is owed from the airlines in damages.