09 June 2007

Airline fuel surcharges illegal?

The Times of London has been reporting recently on the use of fuel surcharges by airlines and in particular British Airways:

"Airline drives up price of holidays" 9 June 2007

"BA chiefs face extradition over 'price fixing'" 27 May 2007

"Walsh says sorry for BA’s breach of price-fix standards" 19 May 2007

"BA admits it breached price fixing rules" 18 May 2007

According to a BBC story on 14 February 2006, an Associated Press story on 15 February 2006 and an Asia Times story on 22 February 2006, competition authorities from the European Commission, United Kingdom, the United States and Korea were investigating this issue in relation to cargo rates and searching airline offices.

A large number of class-action law suits targeting airlines followed in the United States, Canada and Australia. The Australian case taken by law firm Maurice Blackburn Cashman was reported in International Herald Tribune on 1 February 2007.

In New Zealand the Commerce Commission took court action on the airline practice of having separate fuel surcharges on top of advertised passenger fares and won its cases. In June 2006 Air New Zealand UPDATED was fined NZ$600,000 and in October 2006 Qantas UPDATED was fined NZ$380,000 over misleading advertising.

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