U.S government prosecutors have fined 21 airlines $1.7 billion to date in a price-fixing scheme that has cost America’s flying public and cargo shippers millions in a case that dates back to 2000.
Rather than fix problems plaguing the airline industry a decade ago, executives at global carriers scrambled to find an easy way out and avoid financial ruin reports the Associated Press. Between 2000 and 2006 airlines artificially raised passenger and cargo fuel surcharges to make up for lost profits.
“As an example of the impact of the conspiracy, fuel surcharges imposed by some of the conspirators rose by as much as 1,000 percent during the conspiracy, far outpacing any percentage increases in fuel costs that existed during the same time period,” said former Associate Attorney General Kevin J. O’Connor.
They might have not been caught either had it not been for two airlines coming forward to turn in their conspirators. Admitting their “mistake” allowed Lufthansa and Virgin Atlantic to take advantage of a Justice Department leniency program for helping in the investigation. Still, the two airlines were fined over £120 million after admitting to fixing prices on fuel surcharges.
From fines to prison time for airline executives, penalties vary among individual airlines.
Gadling has been following this story all along and in 2008 told of Qantas airline’s involvement . In the case involving Qantas, the price fixing scheme had a focus on their freight division.
Announcing four guilty pleas in June 2008, O’Connor told the Associated Press that the cases “conservatively, has affected billions of dollars of shipments. Estimates suggest that the harm to American consumers and businesses from this conspiracy is in the hundreds of millions of dollars.”
Airlines fined for price-fixing include British Airways, Korean Air, and Air France-KLM but no major U.S. carriers as the case continues. So far, two former executives have been sentenced to six months in prison and two others were ordered to prison for eight months.
Ongoing charges are pending against 15 executives, nine of whom are considered fugitives.
This is a first: a fractional jet provider and an international airline are partnering up. Flexjet’s fractional owners can now access premium services when they fly overseas on Korean Air. Under this new arrangement, the Flexjet Connect program, members will receive incentives to buy first class tickets on , not to mention elite status for a full year, dedicated check-in and luxury concierge services in select airports. And, Korean Air passengers can reach more than 5,000 U.S. airports with as little as 24 hours’ notice on high-performance Bombardier business jets.
According to Fed Reid, President of Flexjet, “This first-of-its-kind collaboration with Korean Air adds value to our program offerings, while further expanding our global reach.” He adds, “For our discerning fractional customers, this strategic partnership between two industry leaders obsessed with excellence ensures they will experience the same level of comfort and high-quality travel they have come to expect from Flexjet.”
Walter Cho, Senior Vice President, Passenger Business Division, Korean Air, says, “Now our customers can fly privately from a local airport to catch their Korean Air flight, or get closer to their meetings by flying to regional airports, knowing that our partners at Flexjet and Jet Solutions will provide a seamless and convenient travel experience with impeccable service.”
The exercise, called Operation Foal Eagle, is one of three remaining joint exercises left on the Korean peninsula. North Korea is notified every year of the operation, which tends to involve a large number of U.S. military personnel stationed in South Korea. This year, participation is expected to reach 26,000. The countries involved have engaged in high-level talks on the matter.
The communist regime did not indicate the specific problems that would befall South Korean flights that came to close to their neighbor’s airspace, though two flights were downed in the 1980s: one by a Soviet-made fighter jet (1983) and one by bomb-toting North Korean agents (1987).
Of course, North Korea may have issued the warning because it has its own plans for that airspace, with MSNBC reporting that “Kim [Jong Il, North Korea’s leader] hinted the threat could be a way to clear airspace before a possible missile launch.”
Feast your eyes on this airline commercial for Korean Air. For the first 20 seconds of the clip, you’d be convinced you were watching an ad for a new kind of perfume, or an upscale escort agency.
I’m guessing that this is what happens when you tell your ad agency to make something “different”. Thankfully this ad is not as insane as the United Airlines commercial I posted last month, but I still can’t help feeling that the ad completely fails to get me interested in flying with Korean Air. Then again, I am writing about it, and PR people keep telling me that any press is good press…
Passengers on board a Korean Air flight last week were treated to a little unexpected drama: the birth of a baby boy.
A woman who was seven months pregnant went into labor midway through a 14-hour flight from the Philippines to New York City last Wednesday.
The baby boy, named Jadan, was delivered by his father and a Korean surgeon who happened to be on board. The delivery took place on the floor of the plane’s galley. Weighing in at under 3 pounds at birth, Jadan was taken to a New York hospital when the plane landed, stabilized and then moved to Lourdes Medical Center in Camden, New Jersey, the Associated Press reports.
Lourdes tells the AP that Jadan was born at 37,000 feet. Sounds like a record to me.
He is in stable condition and is expected to remain at the hospital for several weeks.