British Airways has set aside £350 million as a provision to settle anti-competitive fuel surcharge claims.
In a statement accompanying its full year accounts, BA acknowledged that there had been breaches in its “clear and comprehensive” competition compliance policy relating to fuel surcharges on its long haul passenger and cargo flights.
“As a result, it is now appropriate for the company to make a provision, under IAS 37, of £350 million in its annual accounts,” said BA, which called the figure “a best estimate” of the potential cost of settling all competition authority and civil claims although the final figure could be higher.
The company also said it had responded to the information requests it had received as a result of the ongoing investigations by the Office of Fair Trading, European Commission and the US Department of Justice.
In its full year figures, which also include a £396 million credit as a result of a change to its pension scheme, BA posted a slight year-on-year dip in pre-tax profits from £616 to £611 million.
Operating profit was down £92 million on the previous year at £602 million, while turnover was £8,492 million, up from £8,213 million the previous year.
Chief executive Willie Walsh acknowledged it had been a “frustrating” year for its customers but claimed the airline was “on the threshold of a new era” and was on track to achieve a 10 per cent operating margin by March 2008.
Walsh pointed to the opening of Heathrow’s Terminal 5, the ‘open skies’ air treaty between the EU and the US, and the ongoing investment in new aircraft, announcing a new order for eight Airbus A320 family aircraft for the shorthaul fleet.