Plane to See? Empirical Analysis of the 1999–2006 Air Cargo Cartel

James Nolan and Zoe Laulederkind

A chapter in The International Air Cargo Industry, 2022, vol. 9, pp 241-262 from Emerald Group Publishing Limited

Abstract: “Cargo tariffs are agreed through the IATA machinery, and in theory approved by governments….the IATA Tarff Coordination Conferences still agree cargo tariffs on over 200,000 separate routes. But these tariffs bear little relevance to what is actually charged in the marketplace.” (Doganis, 2002) “The stipulations ICAO standards contain never supersede the primacy of national regulatory requirements. It is always the local, national regulations which are enforced in, and by, sovereign states, and which must be legally adhered to by air operators making use of applicable airspace and airports……ICAO is therefore not an international aviation regulator, just as INTERPOL is not an international police force. We cannot arbitrarily close or restrict a country's airspace, shut down routes, or condemn airports or airlines for poor safety performance or customer service. Should a country transgress a given international standard adopted through our organization, ICAO's function in such circumstances…….is to help countries conduct any discussions, condemnations, sanctions, etc., they may wish to pursue, consistent with the Chicago Convention and the Articles and Annexes it contains under international law.” (ICAO, 2021) In spite of being a growing liberalized global industry served by many firms, much of the international air cargo sector operated as an admitted cartel from 1999 through 2006. Partly due to the way the cartel was discovered, it seems very little empirical analysis to date has been done about the case. We use publicly available airline data to examine whether a diligent antitrust authority could have identified cartel/collusive behavior using established empirical methods. Our findings point to a regulatory failure in an industry whose long-standing business practices effectively “slipped through the cracks,” failing to protect the many shippers of air cargo.

Keywords: Air cargo; cartel; antitrust; air carrier liberalization; structural breakpoints; regulatory oversight (search for similar items in EconPapers)
Date: 2022
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Working Paper: Plane to see? Empirical Analysis of the 1999-2006 Air Cargo Cartel (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:eme:aiaezz:s2212-160920220000009010

DOI: 10.1108/S2212-160920220000009010

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