Go Back  PPRuNe Forums > PPRuNe Worldwide > Australia, New Zealand & the Pacific
Reload this Page >

British Airways fined $546 million for price fixing

Australia, New Zealand & the Pacific Airline and RPT Rumours & News in Australia, enZed and the Pacific

British Airways fined $546 million for price fixing

Old 1st Aug 2007, 22:40
  #1 (permalink)  
Registered User **
Thread Starter
Join Date: May 2005
Location: The Ultimate Crew Rest....
Age: 65
Posts: 2,355
British Airways fined $546 million for price fixing

British Airways fined $546 million for price fixing

By Barbara De Lollis, USA TODAY
WASHINGTON British Airways and Korean Air agreed to plead guilty and pay $300 million apiece for their roles in price-fixing conspiracies that illegally raised travel costs, U.S. Justice Department officials said Wednesday.
Between 2004 and 2006, British Airways the largest airline between the U.S. and United Kingdom raised its fuel surcharge four times to about $110 round trip, up from about $10. The airline now admits it colluded with London-based Virgin Atlantic.

The price of oil during that time had risen about 55%. BA also raised surcharges on cargo shipments more than 20 times between 2002 and 2006.

Korean Air agreed to plead guilty for participating in a conspiracy with unnamed competitors to fix travel prices for passengers, travel agents and shippers for U.S.-Korea flights between 2000 and 2006.

Korean is the largest airline between the U.S. and Korea, and the second-largest carrier between the U.S. and Asia. In a statement, Korean Air said it "has worked hard to cooperate" and is "pleased to be among the first airlines to have reached a full resolution of the matter."

FIND MORE STORIES IN: Justice | British Airways | Lufthansa | Virgin Atlantic | BA | Korean Air
Earlier on Wednesday, the U.K.'s anti-trust regulator, the Office of Fair Trading, said that BA agreed to pay about $246 million as a fine to that government for its role in conspiring to fix fuel surcharges with Virgin Atlantic.

The price fixing was still going on when FBI agents executed search warrants at the airlines last year, Justice officials said. It is not clear whether the price fixing is still going on today, but the investigation continues and srucharges haven't been rolled back. The airline is not required to lower the fees, Hammond said.

Virgin Atlantic first alerted authorities to the collusion in 2006. German carrier Lufthansa also went forward to authorities about its participation. Because they'd admitted participation, Virgin Atlantic and Lufhansa have been spared fines and criminal prosecution, said Scott Hammond, one of the Justice department officials who announced the pleas.

The two carriers will be obligated to pay restitution to their U.S. passengers, Justice Department officals say.

It was not immediately clear after the press conference where Justice Department officials announced their actions how or whether British Airways or Korean Air passengers will be able to seek reimbursement.

In a statement, BA CEO Willie Walsh acknowledged collusion but denied that passengers were overcharged.

"Fuel surcharges are a legitimate way of recovering costs," said Walsh, blaming the illegal conduct on "a very limited number of individuals within British Airways."

The department did not estimate how much extra airline passengers and companies have paid as a result of the schemes, because it's unknown what the market would have dictated had executives not colluded, said Hammond.

Justice officials did not rule out the possibility of jail sentences for executives who carried out the conspiracy.

The $600 million in criminal penalties levied on Korean Air and British Airways from the USA's Justice Department are subject to court approval. The fines would have been heavier had BA and Korean not agreed to cooperate in the investigation, Hammond said.
lowerlobe is offline  
Old 1st Aug 2007, 23:35
  #2 (permalink)  
Join Date: May 2001
Location: Back again.
Posts: 1,141
Standby. That's on top of the Poms already hitting them with a multi-million fine as well isn't it?
Lodown is offline  
Old 2nd Aug 2007, 06:47
  #3 (permalink)  
Join Date: Aug 2006
Location: Duckberg
Posts: 168
BA "colluded" with Virgin Atlantic?? My my, things have certainly changed from days of old....

Launchpad McQuack is offline  
Old 2nd Aug 2007, 07:01
  #4 (permalink)  
Join Date: Jul 2007
Location: At a Bordello
Posts: 105
I saw on BBCW where Virgin dobbed in BA to the authorities.
Lord Flashhart is offline  
Old 2nd Aug 2007, 08:15
  #5 (permalink)  
Join Date: Dec 2001
Location: Brisvegas
Posts: 2,738
Branson has got a bloody hide. Talk about trying to stake out the moral high ground. Branson has fought against BA for years, taking them to court on previous occasions. Then to collude with them for a few years THEN decide top dob them in...how low can you get.

It takes at least TWO to collude...so how much will VA be fined...oh there is a deal on the table huh...more business leaders and pillars of the community behaving badly and getting caught out. It turns my stomach.
Icarus2001 is offline  
Old 2nd Aug 2007, 09:41
  #6 (permalink)  
Join Date: Oct 2006
Location: ...
Posts: 341
Already being discussed here in the airlines forum, where it belongs.
ScottyDoo is offline  
Old 2nd Aug 2007, 12:28
  #7 (permalink)  
Join Date: Oct 2006
Location: Perth
Posts: 506
Oh Scotty, aren't you the tough guy !!!

Since when were you the self appointed moderator.

stubby jumbo is offline  

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off

Thread Tools
Search this Thread

Contact Us Archive Advertising Cookie Policy Privacy Statement Terms of Service

Copyright 2018 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.