Broken trust threatens industry?
The price fixing scandal that attracted worldwide media coverage throughout 2007 has potentially created an air cargo community void of internal trust.
This was the view recently aired by a high profile industry figure to Air Cargo Middle East & India. Unwilling to expose his identity, the point raised is nevertheless a darkening take on a series of events that has seen around 12 leading carriers subjected to formal accusations from the European Union or US Department of Justice.
The scale of collaboration involved in the price fixing scandal is a startling reminder that all is far from well inside the airfreight industry. A bone of contention that seems set to reside for the foreseeable future, coping with rising operational costs is an exhausting topic for all involved within the sector.
Price fixing appears a drastic solution and one that has tarnished both the reputation of the carriers involved and the industry as a whole. However rather than cast judgment on the accused, I believe it more important to study the potential cloud of mistrust and fear the scandal could provoke.
For one, the heavy fines imposed on British Airways and Korean Air Lines in August of 2007 prove that carriers linked to the fiasco face a heavy burden for their supposed involvement. Each were fined US$300 million by the US Department of Justice, a figure steep enough to make the blood of many airlines run cold.
Only last month, another three airlines were linked to the scandal and formally accused of violating European rules. The ongoing nature of the issue could therefore have created an air of tension within the industry for almost a year. It seems conceivable that such prolonged uncertainty would have an adverse affect on an industry already feeling the weight of the US economic crunch.
Greater standardisation throughout the air cargo sector and the broader supply chain has been identified as one of the key mechanisms for change. Such progress hinges on communication and if industry rumours are true, the price fixing scandal could create potential barriers. It is difficult to estimate the damage inflicted by the spiraling number of court cases, especially from a viewpoint within the Middle East.
The region's players are notably absent from the controversy and last month's World Air Cargo Event in Bahrain proved that community spirit still exists domestically.
Yet it seems that if such bonds of trust have been broken in the global market, regional players would be aware of its existence. Have any of our readers encountered conspiracy theories of this kind and if so we invite them to share their views on the potential damage they have caused.