Quantas Guilty Of Price Fixing

Quantas became the third foreign airline to admit to price-fixing and agree to pay a fine to the U.S. government, joining British Airways PLC and Korean Air Lines Co. Ltd, says the Associated Press.

Earlier this year, British Airways PLC and Korean Air Lines Co. Ltd. each pleaded guilty and agreed to pay separate $300 million criminal fines for their roles in conspiracies to fix the prices of passenger and cargo flights.

Qantas was charged with carrying out the price-fixing by participating in meetings to discuss the cargo rates to be charged on certain trans-Pacific routes to and from the U.S., and then levying rates according to the agreements reached.

“It was so unnecessary, they didn’t really have to collude,” said airline consultant Michael Boyd, adding that cargo rate increases and fuel surcharges were justified based on rising oil prices in recent years.

Price collusion is a weird crime. According to Boyd, raising rates because you’ve noticed your competitors raise them isn’t illegal, “But picking up the phone and talking about it is.”

Qantas Airways guilty of fixing prices [BusinessWeek]
(Photo:stromo)