British Airways Plc and Korean Air Lines Co pleaded guilty in US court this week to a global price-fixing conspiracy and were each fined 300 million US dollars.
It was among the largest criminal penalties ever imposed in a US antitrust case and the first levied in the price-fixing investigation that is continuing and could involve charges against other carriers, officials have said. European and South Korean authorities are also investigating. British Airways will pay a 247 million fine in Britain. British Airways and Korean Air admitted to colluding with rivals on charges for passenger fares and cargo to help ease the impact of sharp increases in fuel prices. The British Airways conspiracy ran from 2002 to 2006 while the one involving Korean Air went from 2000 to 2006. "This is a very serious offense," said US District Judge John Bates in handing down the Korean Air sentence. "The amount of commerce involved obviously reflects the seriousness." Bates did not reveal the names of executives from either airline involved in the scheme or say whether any had been charged. The US$300 million fines had been negotiated between the companies and the Justice Department beforehand. In both cases, they were below the amount called for in federal sentencing guidelines. But Bates said the amounts were reasonable considering the airlines cooperated. British Airways assisted Justice Department investigators with documents that would not otherwise have been accessible to US authorities. Korean Air also provided paperwork, and Bates said its cooperation led "to the implication of other carriers." Bates was not more specific but the investigation has touched a number of airlines. Virgin Atlantic Airlines and Deutsche Lufthansa AG earlier agreed to cooperate under a leniency programme that allows a company to voluntarily disclose its participation in an antitrust crime and avoid conviction. Virgin Atlantic and Lufthansa must still pay restitution to consumers. At least 11 other carriers have said they were asked for information or are under investigation by U.S. and European authorities. In addition to American Airlines parent AMR Corp., Air France-KLM and Japan Airlines, they are SAS Group, United Parcel Service Inc., Singapore Airlines Ltd., Cathay Pacific Airways Ltd., UAL Corp.'s United Airlines, Chile's LAN Airlines SA, Cargolux Airlines International SA and Atlas Air Worldwide Holdings Inc.'s Polar Air Cargo.