SEOUL (AFP) - South Korea's largest carrier, Korean Air (KAL), said on Friday it had agreed to pay US$65 million (S$83 million) to settle a class-action lawsuit by US passengers over alleged price fixing.

Korean Air said it would pay US$39 million in cash and US$26 million in coupons to passengers who have accused the airline of conspiring with local rival Asiana Airlines to establish artificially high prices for travel between South Korea and the United States.

A group of passengers launched a lawsuit after the US Department of Justice slapped Korean Air with a US$300 million fine and Asiana with US$50 million over anti-trust violations in 2000.

Korean Air said it had reached an agreement with the passengers in July for a quick and smooth resolution of the lawsuit.

"The agreement does not mean our company recognises price fixing. It's just aimed at ending a drawn-out lawsuit in a smooth manner," a KAL spokeswoman told AFP.

A US court hearing has been scheduled for December 2 for final approval of the settlement.

Asiana settled its side of the case in 2011.

"Asiana and Korean Air have agreed to settle this case to avoid the cost and uncertainty associated with continuing it," according to a website supervised by the court and controlled by an independent settlement administrator.