The US Department of Justice announced last month that British Airways and Korean Air each agreed to plead guilty and pay separate $300 million criminal fi nes for their roles in conspiracies to fi x the prices of passenger and cargo fl ights. The DOJ said the plea agreements were the fi rst to arise from the Antitrust Division’s ongoing investigation into the air transportation industry.
Under the plea agreements, which are subject to court approval, British Airways and Korean Air have agreed to cooperate with the Department’s ongoing investigation. The Department said that passengers who fl ew on British Airways fl ights between the UK and the US during the charged period paid more for their tickets as a result of the illegal cartel.
The Department also noted that during the air cargo conspiracy, British Airways’ fuel surcharge on shipments to and from the US changed more than 20 times and increased from four cents per kilogram of cargo shipped to as high as 72 cents per kilogram.
The Department charged Korean Air with agreeing with air cargo competitors on rates charged to customers in the US and elsewhere for international air cargo shipments. The Department noted that the conspirators agreed to increase the fuel surcharge over time from 10 cents per kilogram to as high as 60 cents for each kilogram of cargo shipped from the US.
The Department also charged that Korean Air reached an agreement with its rival to fi x certain passenger fares for fl ights from the US to Korea.
Meanwhile, British Airways may also get fi ned by the European competition authorities for its role in the alleged international conspiracy to fi x air cargo surcharges. Last month, British Airways was fi ned 121.5 million pounds ($289 million) by the U.K. Offi ce of Fair Trading for colluding with Virgin Atlantic to fi x fuel surcharges on passenger fares. Lufthansa agreed last fall to pay $85 million to settle class-action lawsuits related to the probe. American Airlines and United Airlines reached nonmonetary settlements in similar cases, while FedEx acknowledged being subpoenaed last summer. UPS has said it does not believe it is a target of the investigation.
In February last year US and European offi cials raided airlines on both sides of the Atlantic as part of the probe into possible price-fi xing of freight rates. Airlines known to have been contacted by offi cials include: Air France-KLM, SAS, Cargolux and Air Canada’s parent, ACE Aviation Holdings.
