That's A Price Neither Will Be Able To Fix

Britain's largest airline and South Korea's national carrier each received fines of $300 million Thursday, after admitting they conspired to fix pricing on international flights.

As ANN reported, British Airways PLC and Korean Air Co. pleaded guilty earlier this month to antitrust conspiracy charges. The carriers admitted they teamed up with rivals over cargo rates and fuel surcharges added to fares in response to rising oil prices, thus increasing prices to passengers and international shippers.

US District Judge John D. Bates said this case "involved considerable commerce and reflected long-term and widespread conduct involving major airlines and players," according to The Associated Press.

Both companies were rewarded with lesser fines because they cooperated with the US Justice Department.  Good thing, too. Korean Air's fine could have been near $600 million while British Airways' could have pushed $900 million, the AP reported.

"As a foreign corporation with headquarters outside the United States, BA could have retained highly relevant documents in its foreign offices and refused to cooperate," prosecutors wrote. "It chose, however, to assist the United States early in its investigation in a highly significant and useful way."

The fines levied were the second largest antitrust sanction by the Justice Department since 1995. The largest, $500 million, was given to F. Hoffman-La Roche in a 1999 price-fixing case.

British Airways said between mid-2004 and early 2006, it conspired with Virgin Atlantic over the surcharges... but Virgin Atlantic wasn't having any of that and reported it to authorities. The airline isn't named in the case, nor is it expected to be fined.

During the times the illegal activity was occurring, fuel surcharges increased from about $10 to around $120 per ticket for a round trip, long-haul flight on either carrier.

"(Thursday's) sentencing demonstrates that those who violate the antitrust laws and seek to deny American consumers and businesses the benefits of competition will be held accountable for their actions," said Scott D. Hammond, Deputy Assistant Attorney General for Criminal Enforcement of the Department's Antitrust Division.

"The Antitrust Division is actively continuing its investigation into the air transportation industry," Hammond added... meaning more airlines may soon have to pay the piper.

FMI: www.britishairways.com, www.koreanair.com, www.usdoj.gov