British Airways (BA) and Korean Air Lines pleaded guilty in a US court last night to a global price-fixing conspiracy and were each fined $300 million.
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 ongoing and could involve charges against other carriers.
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."
The $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 Judge Bates said the amounts were reasonable considering the airlines co-operated.