(ii) The initial decision by TY and JK to collude on the fuel surcharge appears to meet the interests of both companies to maximise profits. In this sense, it appears they were acting at level 1.2-there was fairness in the exchange in that both companies benefited from the increased prices being charged. The collusion meant that there was fairness in the exchange-both airlines benefited.

　　It is likely that the price fixing could be explained as level two of Kohlberg. While airline customers would expect TY and JK to make some profit(else they would go out of business) that profit would not be "excessive". It is possibly reasonable to expect an airline to charge a fuel surcharge, placing the decision at level 2.1. However, he fact that there was collusion means there was an attempt to raise prices artificially, which would not be expected by customers. Level 2.1 action is therefore not appropriate.

　　Regarding the decision by JK to disclose that there had been a price fixing agreement, it appears that the directors are attempting to justify the company's initial lack of dsclosure, the argument that disclosure is now "in the public interest" appears to be focused on Kohlberg stage 3.1. In other words, disclosure was expected by society and therefore disclosure was made. This reasoning obviously ignores the initial issue of collusion and lack of disclosure. The disclosure could therefore simply be stated as being at level 2.1; disclosure would be expected by their customers.