Two British-based airlines will pay trans-Atlantic passengers a combined $210 million to settle a lawsuit that accused them of colluding to gouge flyers with fuel surcharges, according to an agreement granted preliminary approval on Friday.
U.S. District Court Judge Charles Breyer in San Francisco granted tentative approval for British Airways PLC and Virgin Atlantic Airways to refund one-third of the surcharge paid by each of the airlines' trans-Atlantic passengers between Aug. 11, 2004 and March 23, 2006. Breyer has scheduled a hearing for Sept. 12 to make his decision permanent.
The class action lawsuit represents 5.1 million passengers who bought tickets in the United Kingdom and another 2.1 million passengers who purchased tickets in the United States.
British Airways last year paid nearly $550 million to U.S. and British officials and pleaded guilty to price fixing after admitting to conspiring with Virgin. Virgin wasn't fined or charged because it blew the whistle on the conspiracy and began cooperating with U.S. and U.K. officials in March 2006.
Virgin executives told investigators that the company tipped off BA seven times between 2004 and 2006 that it was planning to increase fuel surcharges. Criminal investigations were also launched on both sides of the Atlantic.
The U.S. Department of Justice has been investigating price fixing allegations throughout the industry over the last 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 the other carriers are pending.
