British Airways is to be fined at least £121.5 million ($246 million) for participating in anti-competitive activity centred on fuel surcharges for long-haul passenger fares and the airline’s cargo business.
The fine is the result of a settlement with the UK’s consumer protection agency, the Office of Fair Trading. But it is expected to be supplemented by a further financial penalty from the US Department of Justice today after BA entered a plea agreement with US authorities, who were also conducting an inquiry.
BA says that the combined fine will be “consistent” with a provision of £350 million set aside earlier this year. The agreements will resolve both the UK and US investigations into the airline’s passenger and cargo business.
The anti-competition probe, opened last year, follows conversations between staff at British Airways and Virgin Atlantic Airways which included information on proposed changes to fuel surcharges on long-haul flights.
Virgin Atlantic subsequently relayed details of these exchanges to the Office of Fair Trading and, under the agency’s policies, was granted immunity and escaped being penalised.
Two senior personnel at BA – commercial chief Martin George and communications director Iain Burns – were given leave of absence and subsequently resigned from the airline in the wake of the investigation.
Chief executive Willie Walsh insists that passengers were not overcharged as a result of the activity.
“Fuel surcharges are a legitimate way of recovering costs,” he says. “However this does not in any way excuse the anti-competitive conduct by a very limited number of individuals within British Airways.
“Anti-competitive behaviour is entirely unacceptable and we condemn it unreservedly. We have a long standing competition compliance policy which requires all staff to comply with the law at all times. I am satisfied that we have the right controls in place. However, it is deeply regrettable that some individuals ignored our policy.”
BA says that the fine was reduced to take into account the airline’s willingness to co-operate with the investigation, and points out that the Office of Fair Trading could have imposed a penalty of up to 10% of the carrier’s global turnover.
Source: FlightGlobal.com
