BA, Korean Air admit to U.S. price-fixing; each to each pay $300 million

BA, Korean Air admit to U.S. price-fixing; each to each pay $300 million

Related Stories •   U.K. fines British Airways '121.5 million for price-fixing

British Airways and Korean Air Lines have each agreed to plead guilty and pay separate $300 million fines for their part in fixing passenger and cargo fuel surcharges, the U.S. Justice Department said on Wednesday.
   The announcement capped an expensive day for British Airways. It was earlier hit with a '121.5 million ($247 million) fine by the United Kingdom’s Office of Fair Trading after admitting to fixing fuel surcharges on long-haul passenger flights from August 2004 to January 2006.
   Both airlines have agreed to assist with the Justice Department’s antitrust division and its ongoing investigation into the air transportation industry.
   “When British Airways, Korean Air and their co-conspirators got together and agreed to raise prices for passenger and air cargo fares, American consumers and businesses ended up picking up the tab for their illegal conduct,' said Acting Associate Attorney General William W. Mercer. “Today's enforcement actions demonstrate that the antitrust division will investigate and prosecute illegal cartel activity — here and abroad — in order to ensure that American consumers and businesses are not harmed by illegal cartel activities.”
   The Justice Department charged British Airways with engaging in a conspiracy to “suppress and eliminate competition” by fixing the rates charged to customers for international air shipments of cargo from March 2002 to February 2006, and for fixing fuel surcharges charged to passengers on long-haul international flights from August 2004 to February 2006.
   Korean Air was charged with “participating in a conspiracy” to fix fares charged to passengers and certain travel agents for flights from the United States to Korea from January 2000 to July 2006, and also fixing international cargo shipments from at least January 2000 to February 2006.
   Two other airlines, Virgin Atlantic and Lufthansa, have been conditionally accepted into the antitrust division's Corporate Leniency Program that should see them avoid any heavy fines or criminal convictions.
   Virgin Atlantic entered the program after reporting its participation with British Airways in the passenger fuel surcharge conspiracy. Lufthansa was conditionally accepted after it disclosed its role in the international cargo conspiracy in which British Airways and Korean Air were participants. Virgin Atlantic and Lufthansa are obligated to pay restitution to the U.S. victims of their conspiracies.
   Other international airlines involved in the probe include American Airlines, United Airlines, Japan Airlines, Air France-KLM, Cathay Pacific, Scandinavian Airlines System, and Cargolux.