Record fine for BA price-fixing

1 August 2007
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02 August 2007 | Paul Snell

British Airways (BA) will pay almost £270 million in fines for fixing the price of fuel surcharges on long-haul flight tickets.

The airline has been fined £121.5 million by the Office of Fair Trading (OFT) in the UK, and $300 million (£147.7 million) by the US Department of Justice.

The firm admitted it had colluded with Virgin Atlantic to fix surcharges for fuel added to tickets for long-haul flights. Between August 2004 and January 2006 charges rose from £5 to £60 a ticket on British Airways and Virgin Atlantic.

BA chief executive Willie Walsh said in a statement: "I want to reassure our passengers that they were not overcharged. Fuel surcharges are a legitimate way of recovering costs. However, this does not excuse the anti-competitive conduct by a limited number of individuals within British Airways. Anti-competitive behaviour is entirely unacceptable and we condemn it unreservedly."

Virgin Atlantic will not face any penalty, as it received immunity for being the first to give details to the OFT about the cartel.

OFT chairman Philip Collins said: "This case, and the substantial penalty imposed, will send an important message to corporate boards and business leaders about our intention to enforce the law. It serves to remind companies of the substantial risks involved if they are found to engage in such behaviour."

BA had already set aside £350 million to pay as a result of the investigation (Web news, 21 May).



SMaug2007

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