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Travel News

$210M settlement in airline price fixing is approved

Written by editor

SAN FRANCISCO — An agreement by two British-based airlines to pay roughly $210 million to settle a massive price-fixing lawsuit met with tentative approval from a federal judge on Friday.

SAN FRANCISCO — An agreement by two British-based airlines to pay roughly $210 million to settle a massive price-fixing lawsuit met with tentative approval from a federal judge on Friday.

The class action lawsuit, which accused the carriers of colluding to gouge trans-Atlantic passengers with fuel surcharges, was brought on behalf of 5.1 million passengers who bought airplane tickets in the United Kingdom and another 2.1 million passengers who purchased tickets in the United States.

U.S. District Court Judge Charles Breyer in San Francisco granted tentative approval for British Airways PLC and Virgin Atlantic to refund one-third of the surcharge paid by each of the airlines’ passengers between Aug. 11, 2004 and March 23, 2006. Breyer has scheduled a hearing to make his decision permanent on Sept. 12.

British Airways last year paid nearly $550 million to U.S. and British officials and pleaded guilty to price fixing after admitted conspiring with Virgin. Virgin wasn’t fined or charged because it turned itself into U.S. and U.K. officials in March 2006. Virgin executives told investigators that the company would tell BA counterparts it was planning to increase fuel surcharges seven times between 2004 and 2006. Criminal investigations were also launched on both sides of the Atlantic Ocean.

The U.S. Department of Justice has been investigating price fixing allegations throughout the industry for several years.

Last week, Japan Airlines agreed to plead guilty and pay a $110 million criminal fine for its role in a conspiracy to fix rates for international cargo shipments. In addition, Korean Air agreed to pay a $300 million fine and Qantas agreed to pay $61 million. Qantas’ chief executive said in November that U.S. and foreign antitrust regulators were investigating up to 30 airlines for similar conduct.

Similar price fixing class action lawsuits against other carriers are pending.