The Office of Fair Trading could take more than a year to rule whether Virgin Atlantic and Cathay Pacific broke UK law by colluding on fares.
The OFT issued a statement alleging the airlines broke competition law by fixing prices between London and Hong Kong over several years yesterday. It did not detail the allegations, but said the case involved alleged contacts between employees of the airlines to coordinate their “respective pricing strategies”.
The investigation follows revelations by Cathay Pacific, which is likely to enjoy immunity as a result of its whistle-blowing role.
The OFT stressed it had not yet decided there had been a breach. Senior director of cartels and criminal enforcement Ali Nikpay said: “The parties will have an opportunity to respond to our proposed findings before we decide whether competition law has been infringed.”
An OFT spokesman added: “There is no legal time frame for reaching a decision, but previous cases have taken a year to 18 months.”
The case has echoes of a previous OFT investigation into the fixing of fuel surcharges on transatlantic flights by British Airways and Virgin Atlantic, which resulted in a £121 million fine for BA in 2007. Virgin escaped prosecution in that case after acting as the whistle blower.
The BA-Virgin case continues to reverberate, with one serving and three former BA executives currently on trial at Southwark Crown Court on charges arising from the investigation.