Cathay Pacific has turned “whistleblower” on Virgin Atlantic to prompt a price fixing probe on the London to Hong Kong route by the Office of Fair Trading.
The action by the Hong Kong carrier means that it will be immune from any penalties that may arise from the case.
The OFT yesterday issued a statement of objections alleging that Cathay Pacific Airways and Virgin Atlantic have infringed competition law in relation to passenger services on the London to Hong Kong route.
It said the case concerns a number of alleged contacts between employees of the two airlines over a number of years.
It is alleged that the contacts had the object of co-ordinating the carriers’ respective pricing strategies on passenger fares through the exchange of commercially sensitive information on pricing and other commercial matters, the OFT said.
The OFT made clear that “at this stage it should not be assumed that the parties involved have broken the law”.
The OFT will decide if the law has been breached after it has reviewed any responses to the statement of objections.
The OFT’s Ali Nikpay, senior director of cartels and criminal enforcement, said: “For a market economy to work effectively it is vital that competing companies determine their pricing strategies independently of each other and do not seek to avoid the rigours of competition through unlawful coordination.
“The parties will now have an opportunity to respond to our proposed findings before we decide whether competition law has in fact been infringed.”
Virgin pledged to “robustly defend itself” against the allegations.
by Phil Davies
