Washington – British Airways and Korean Air Lines were each fined $300 million in a U.S. court Thursday after admitting they reached secret agreements with competitors in setting fuel surcharges.
Both companies cooperated with investigators and escaped penalties that could have been two to three times higher, U.S. District Judge John Bates said in hearings.
Thursday’s guilty pleas ended the first criminal prosecutions arising from a multinational antitrust investigation of the air- transportation industry. European and U.S. regulators are probing at least 11 other companies, including AMR Corp.’s American Airlines, Air France-KLM Group and Japan Airlines Corp., for possible price fixing.
“We wonder what is yet to come from larger carriers in the cargo industry,” Chris Avery, a JPMorgan analyst in London, said in an e-mail. “British Airways has made provisions which it thinks are adequate” to pay the fines.
British Airways, Europe’s third-largest airline, set aside $701 million May 18 to settle “all known claims in relation to these matters.” This included civil claims in the U.S.
Both airlines pleaded guilty to two criminal counts of conspiracy in setting extra charges on passenger and cargo flights to help offset rising fuel costs.
“Both counts involve considerable commerce and reflect long- term, widespread conduct that involves several major airlines,” Bates said. “These are very serious charges.”
British Airways’ fuel surcharge on round-trip passenger flights between the U.S. and the U.K. rose to $110 per ticket in 2006, from $10 in 2004, the U.S. Justice Department said Aug. 1.
British Airways could have been fined as much as $894 million, while Korean Air faced a possible fine of as much as $633 million, Bates said.
