United, American Airlines Settle in Price Collusion Suit

By Thomas Hall

Published on September 14, 2006

The lawsuit stems from a criminal investigation by U.S. and European Union officials into more than a dozen cargo airlines. Investigators were looking into accusations of price-fixing on surcharges for security, insurance, and fuel. Lufthansa AG, a German cargo airline named in the suit, paid $85 million to be released from obligation.

Although details of the settlement have not been disclosed, an official with United Airlines says the company’s agreement with the majority of the plaintiffs will dismiss United from the civil litigation, pending court approval.

A spokesman with American Airlines says the company has also reached a pending settlement that requires no payment from the airline. The spokesman also says American has been told it is not a target of the investigation.

If approved, the settlements should stand unless criminal charges are filed against the airlines. To file criminal charges, the Department of Justice would need to show United and American were conspiring to fix prices, instead of reacting to competitors’ increases. A spokesman with American says he believes the airline was swept up in an investigation mainly focused on European carriers.

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