United Kingdom
United States
Asia Pacific
BA fined £121.5m by OFT over fuel surcharge price-fixing
British Airways has been fined £121.5m for colluding with other airlines over the price of fuel surcharges on long-haul flights.
The figure has been agreed with the Office of Fair Trading but BA must wait until this afternoon to find out how much it will be fined by the US Department of Justice in relation to the price-fixing.
BA has already put by £350 million for the fines after admitting to the allegations of colluding with Virgin Atlantic at least six times between August 2004 and January 2006. During that time, surcharges rose from £5 to £60 per ticket.
Chief executive, Willie Walsh said: “I want to reassure our passengers that they were not overcharged. Fuel surcharges are a legitimate way of recovering costs.
“However this does not in any way excuse the anti competitive conduct by a very limited number of individuals within British Airways.
“Anti-competitive behaviour is entirely unacceptable and we condemn it unreservedly. “We have a long-standing competition compliance policy which requires all staff to comply with the law at all times.
“I am satisfied that we have the right controls in place. However, it is deeply regrettable that some individuals ignored our policy.”
He said Virgin Atlantic and British Airways exchanged information on proposed changes to their respective long-haul passenger fuel surcharges in response to fluctuating oil prices.
But last year Virgin Atlantic went to the OFT and revealed its part in these conversations. As the first applicant under the terms of the OFT’s leniency policy, Virgin qualified for conditional immunity and as a result has not been required to pay any penalty.
OFT fines could be up to 10% a company’s worldwide turnover, but this one represents just over 1% of BA’s group turnover.
When the allegations were first made, BA commercial director Martin George and communications chief Iain Burns went on leave of absence. Last October, they both quit.
The OFT and DoJ continue with their criminal investigation into the conduct of individuals.
By Bev Fearis
Bev
Editor in chief Bev Fearis has been a travel journalist for 25 years. She started her career at Travel Weekly, where she became deputy news editor, before joining Business Traveller as deputy editor and launching the magazine’s website. She has also written travel features, news and expert comment for the Guardian, Observer, Times, Telegraph, Boundless and other consumer titles and was named one of the top 50 UK travel journalists by the Press Gazette.
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