The Labor Day Knucklehead Award Marathon Part Seven
Our seventh winners today are British Airways and Korean Air. They get the award for the following.
WASHINGTON - Two major international airlines were fined $300 million apiece Thursday in the United States after admitting they conspired to fix prices on overseas flights and agreeing to help prosecutors investigate other airlines, including American Airlines.This isn't British Airways first Knucklehead award. Click here to read the other.
British Airways PLC, Britain's largest airline, and Korean Air Co., South Korea's national carrier, pleaded guilty to antitrust conspiracy charges. They acknowledged colluding with rivals over cargo rates and fuel surcharges, which were added to fares in response to rising oil prices. That meant higher costs for international shippers and passengers.
Thursday's guilty pleas end the first criminal prosecutions arising from a multinational antitrust investigation of the air transportation industry. European and U.S. regulators are investigating at least 11 other companies including AMR Corp.'s American Airlines, Air France-KLM Group and Japan Airlines Corp. for possible price fixing.
Korean Air released a statement saying it was "committed to antitrust compliance" and was taking steps to make sure the conduct was never repeated. Neither company addressed the extent of its cooperation or how widespread the practice was in the industry.
As part of their plea deals, the airlines acknowledged they colluded with other unidentified companies from 2000 to 2006. The cargo rate scheme meant higher shipping costs for businesses. For passengers, the scheme meant more expensive tickets because the surcharges were wrapped into the ticket fare.
Price fixing leading up to 300 million dollar fines is good enough for me. I make British Airways and Korean Air our Seventh Knuckleheads of the Day.
Linked to- Big Dog, Bright & Early, Cao,