Chile LAN says facing EU competition allegations

SANTIAGO, Dec 27 (Reuters) - Chile's largest air carrier LAN Airlines LAN.SN said late on Thursday that its cargo unit LAN Cargo S.A. was one of 25 global cargo airlines facing allegations of possible price fixing of cargo fuel surcharges.

"On December 26, 2007, the Directorate-General for Competition of the European Commission has notified LAN Cargo S.A. and LAN of the initiation of proceedings against 25 cargo airlines, among them LAN Cargo S.A., for allegations of anti-competitive behavior in the air freight business," the company said in a statement.

The allegations date back to an investigation from February 2006 by the European Commission, in conjunction with the Department of Justice of the United Status, for possible price fixing of cargo fuel surcharges and other fees in the European and United States air cargo markets.

The European Commission charged several airlines earlier this month, including British Airways (BAY.L), Lufthansa (LHAG.DE) and SAS (SAS.ST), for fixing freight-services prices. That followed raids on both sides of the Atlantic last year, which also involved a U.S. Justice Department probe.

(For a story on the probe, please click on [ID:nL21112914].)

The commission widened its probe to include two other Asian carriers, Hong Kong based Cathay Pacific (0293.HK) and Singapore Airlines (SIAL.SI).

LAN said it was currently studying the terms of the notification in order to determine its course of action and would respond formally in due course.

"The Company has maintained and maintains a policy of strict compliance with existing legislation in the countries in which it operates and condemns any infraction to its rules regarding competition," LAN said.

"Given the current stage of the proceedings, it is not possible at this stage to anticipate the outcome."

LAN said the U.S. Justice Department was still investigating the matter. (Reporting by Pav Jordan; Editing by Valerie Lee)