News

BA price-fixing fine reaches £267m – 01 Aug 2007

British Airways is facing fines totaling £267 million after admitting price-fixing on long-haul fuel surcharges.


Details of a record £121.5 million fine imposed by the Office of Fair Trading were released earlier today.


The penalty was followed by a further $300 million (£148 million) fine from the US Department of Justice.


The combined figure is within the £350 million that BA has set aside to settle the charges, but the scale of the fines has prompted speculation that criminal charges will follow.


Becket McGrath, an expert in competition law at Berwin Leighton Paisner, warned: ‘Individuals could go to prison. Most OFT fines are under £1 million. This is in a different league.’


BA admitted that between August 2004 and January 2006 it colluded with Virgin Atlantic over the surcharges added to ticket prices in response to rising oil prices. The surcharges rose from £5 to £60 per fare.


The OFT said Virgin Atlantic was entitled to immunity from any penalty as it had been the first to disclose full details of the collusion.


BA said the fines resolved the OFT and Department of Justice investigations. However, the OFT could yet bring criminal prosecutions against some individuals.


BA chief executive Willie Walsh said: “I want to reassure passengers 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 of a limited number of individuals within BA.”


 


Share article

View Comments

Jacobs Media is honoured to be the recipient of the 2020 Queen's Award for Enterprise.

The highest official awards for UK businesses since being established by royal warrant in 1965. Read more.