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Will airlines pay for price fixing?

Jeremy Hobson Aug 23, 2007
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Will airlines pay for price fixing?

Jeremy Hobson Aug 23, 2007
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TEXT OF STORY

Scott Jagow: Two foreign airlines are going to court today in Washington, D.C. British Airways and Korean Air each face $300 million fines for price-fixing. They colluded with two competitors to jack up fuel surcharges on tickets, but those competitors are going to be spared today. More now from Jeremy Hobson.


Jeremy Hobson: British Airways admits it conspired with Virgin Atlantic and Lufthansa to raise fuel surcharge prices. Korean Air also admits involvement.

Between 2002 and 2006, those surcharges — which were tacked onto ticket prices or added to the cost of cargo shipments — jumped by more than 1,000 percent.

Virgin and Lufthansa reported the misdeeds, so they avoid fines, but none of the airlines is off the hook completely.

Attorney Michael Hausfeld is bringing a class action lawsuit that says consumers should be reimbursed for the higher surcharges.

Michael Hausfeld: What the government has fined them is an amount that goes to the government. They have not paid anything yet to the consumers who were cheated.

None of the airlines would comment on tape.

Both BA and Virgin deny that passengers were hurt by the increased fuel surcharges, but Lufthansa has agreed to pay $85 million in a class action settlement involving surcharges on cargo.

In Washington, I’m Jeremy Hobson for Marketplace.

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