Korean Air fined 300 million dollars for price fixing

Aug 1, 2007, 16:39 GMT

Washington - Korean Air Lines will pay a 300-million-dollar fine as part of a guilty plea in a US court for fixing prices on passenger and cargo flights, the US Justice Department said Wednesday.

The US alleges that between January 2000 and July 2006, Korean Air conspired with competitors to fix rates charged for cargo on routes between the Unied States and South Korea. Conspirators agreed to increase a fuel surcharge for cargo, the Justice Department said.

The airline is also charged with fixing rates for passengers on flights between the US and South Korea. Both tickets sold by the airline and those sold to clients through travel agents are involved, the US said.

The plea deal must still be approved by a US district court in Washington.

British Airways was also charged for its role in the price fixing and agreed to pay a 300-million-dollar fine. Britain's Office of Fair Trading also imposed a nearly 250-million-dollar fine on BA over collusion on fuel surcharges with Virgin Atlantic.

'When British Airways, Korean Air and their co-conspirators got together and agreed to raise prices for passenger and air cargo fares, American consumers and businesses ended up picking up the tab for their illegal conduct,' acting Associate Attorney General William W Mercer said in a statement.

He said the department's antitrust division will continue to investigate and prosecute such activities in the US and abroad.

German airline Lufthansa revealed its own involvement in the cargo scheme with British Airways and Korean Air and will likely escape a fine after agreeing to cooperate with the department's investigations. Virgin Atlantic separately agreed to cooperate in the passenger fare investigation involving British Airways.