Details of alleged fare fixing between British Airways and Virgin Atlantic were laid bare in court yesterday in the trial of four BA executives.
Prosecution QC Richard Latham recounted the rises in fuel surcharges on BA and Virgin Atlantic transatlantic fares through 2004 and 2005, saying they were “a product of a long-standing agreement between the airlines”.
He told Southwark Crown Court the cartel began in August 2004, as airlines struggled with a rising oil price, when BA’s then head of communications Iain Burns called Virgin Atlantic’s then corporate affairs director Paul Moore and said: “This is a conversation we aren’t going to have.”
Latham said Burns told Moore that BA was ready to announce an increase in fuel surcharges and, as a result “every long-haul BA and virgin passenger paid more per seat than they would have done”.
Burns is standing trial alongside BA’s former commercial director Martin George, former head of UK and Ireland sales Alan Burnett and current sales and market director Andrew Crawley.
All pleaded not guilty to charges brought by the Office of Fair Trading (OFT) under the Enterprise Act 2002.
Three senior figures at Virgin Atlantic – current chief executive Steve Ridgway, former commercial director Willy Boulter and Moore – have admitted price fixing and will give evidence for the prosecution.
At one point, Latham read an email from Ridgway noting: “Moore has had another of his non-conversations with BA.”
At another, he said Burnett had reprimanded a fellow manager when a BA staff member mistakenly gave travel agents advance notice of a rise in the fuel surcharge.
Latham detailed the matching surcharge rises through 2004 and 2005 and the contacts preceding these.
For example, Virgin Atlantic increased its surcharge from £24 to £30 on September 6 2005, with BA following suit two days later.
Boulter and Burnett had spoken by phone on August 22, said Latham. The next day, a Virgin Atlantic executive group meeting noted: “BA is considering a surcharge, but does not want to lead the market.”
Latham said another BA manager recalled a meeting at the airline on August 30 at which Burnett allegedly said: “I’ve spoken to Virgin and they agreed to go first this time.”
He told the court: “There was agreement between BA and Virgin Atlantic. If not, there may not have been any increase in surcharge in September 2005.”
The prosecution also recounted details of a cricket match between senior figures at both airlines at Richard Branson’s home on September 4.
Photos of the event were first withheld from publication and then released undated. In an email asking a colleague not to distribute the photos, Moore had said: “It might not look too clever to have been fraternising two days before [the surcharge increase].”
The case continues and is expected to last several months.
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