Fall-out continues for BA and Korean Air
LONDON –The fall-out from the huge fines levied on British Airways continues.
BA was fined a record £270m after admitting it had engaged in anti-competitive behaviour by fixing with its competitors the price of fuel surcharges for long-haul flights and cargo.
The carrier was fined £121.5 million (US$246 million) by the Office of Fair Trading in Britain, and $300 million by the US Justice Dept after parallel trans-Atlantic investigations.
The Justice Department also levied a $300 million fine on Korean Air Lines for colluding with competitors to fix fuel surcharges on cargo shipments to the United States and fix some passenger fares from the United States to Korea.
American officials said British Airways and Korean Air Lines were involved in a conspiracy with the German carrier Lufthansa to fix charges for international cargo shipments.
The Justice Department said Virgin and Lufthansa would not face penalties because they had come forward to the authorities.
In February, European Commission officials raided premises belonging to British Airways and several other airlines over alleged price fixing of cargo operations.
The EC said it had carried out “unannounced inspections” at the various premises as it had “reason to believe the companies concerned may have violated Article 81 [of the] EC-Treaty, which prohibits practices such as price fixing”.
On the fuel surcharge issue, BA now faces the prospect of class actions on behalf of passengers who believe that the airline’s actions were responsible for them paying higher fares.
Virgin Atlantic and British Airways exchanged information on proposed changes to their respective long-haul passenger fuel surcharges in response to fluctuating oil prices.
Last year Virgin Atlantic went to the UK’s Office of Fair Trading and revealed its part in these conversations. As the first applicant under the terms of the OFT’s leniency policy, Virgin qualified for conditional immunity and as a result has not been required to pay any penalty.
Ian Jarrett
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