BA fined £121.5m for price fixing

Source: Stock Market Digital

Date :01/08/2007 08:51:46

British Airways has been fined £121.5 million after it admitted price fixing fuel surcharges on long-haul flights.

BA colluded with Virgin Atlantic over the surcharges, which were added in response to rising oil prices, the Office of Fair Trading (OFT) said.

The airline said in May that it had set aside £350 million to cover fines and the costs of legal action.

The OFT and the US Department of Justice (DoJ) have been investigating the allegations since June last year.

BA had colluded with Virgin Atlantic on at least six occasions between August 2004 and January 2006, the OFT said, during which period surcharges rose from £5 to £60 per ticket.

The DoJ will announce how much it plans to fine BA later on Wednesday.

Virgin Atlantic has been given immunity after it reported BA's activity and is not expected to be fined, the OFT said.

The fine ends the civil case, but a criminal investigation continues.

The OFT said no conclusions could be drawn about whether charges against individuals would be brought.

BA's commercial director Martin George and communications chief Iain Burns left the company last October.

BA's chief executive Willie Walsh said that passengers had not been overcharged because fuel surcharges were "a legitimate way of recovering costs".

However, he acknowledged that the conduct of some of the carrier's employees had been wrong and could not be excused.

"Anti-competitive behaviour is entirely unacceptable and we condemn it unreservedly," he said.

OFT chairman Phillip Collins said that the hefty fine would "send an important message to corporate boards and business leaders about our intention to enforce the law, and serves to remind companies of the substantial risks involved if they are found to engage in such behaviour".

August 1 2007