BRITISH Airways and Virgin will be forced to refund £105m to transatlantic passengers to settle a lawsuit that accused them of colluding on fuel surcharges, following an agreement reached on Friday.
District Court Judge Charles Breyer in San Francisco granted tentative approval for BA and Virgin Atlantic Airways to repay one-third of the surcharge paid by each of the airlines' transatlantic passengers between August 11, 2004, and March 23, 2006
. Breyer has scheduled a hearing for September 12 to make his decision permanent.
The class action lawsuit represents 5.1 million passengers who bought tickets in the UK and another 2.1 million in the US.
BA last year paid nearly £275m to US 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 officials in March 2006.
Last week, Japan Airlines agreed to plead guilty and pay a £55m criminal fine for its role in a conspiracy to fix rates for international cargo shipments. In addition, Korean Air agreed to pay a $300m (£151m) fine and Qantas agreed to pay $61m (£30m). Qantas' chief executive said in November that US 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.
• More airline mergers are predicted with German carrier Lufthansa believed to be considering a move on Bmi, the UK airline which is 50%-owned by Sir Michael Bishop.
Bmi owns 11% of the take-off and landing slots at Heathrow and, while Lufthansa owns 30% of the company, it may sell on the business to rivals including BA, Virgin and Scandinavia's SAS which owns the other 20%.
American Airlines has had early-stage merger talks with US Airways and is in advanced talks for an alliance with Continental Airlines, according to US sources.
News of the talks comes after Delta Air Lines' and Northwest Airlines announced nearly two weeks ago that they planned to merge to become the world's largest airline, seeking to counter skyrocketing fuel prices, a weak economy and a growing competitive threat from European carriers as trade barriers fall on transatlantic travel.
American Airlines' talks with Continental are focused on forming an alliance that could share passengers, much like the SkyTeam partnership that includes Air France-KLM, Alitalia, Czech Airlines, Delta Air Lines, and Northwest Airlines. Continental is also in advanced talks with United Airlines for a full merger, the sources said. Continental will choose either the merger or the alliance, not both, sources said.
Meanwhile, United Airlines is also in serious merger talks with US Airways, and will choose to merge with either Continental or US Airways soon, sources said.
The full article contains 475 words and appears in Scotland On Sunday newspaper.
