BA Fined E400m for Fixing Prices

By Ray Massey

BRITISH Airways faces compensation claims from millions of angry passengers after being fined a record 270million (E400m) yesterday for its role in a price-fixing conspiracy.

BA admitted colluding illegally with arch rivals Virgin Atlantic in a secret deal to agree the level of fuel surcharges imposed on passengers on long-haul flights.

In a 12-month period the surcharge on a flight rose from 6 (e9) to 30 (E45).

BA boss Willie Walsh who was chief executive designate during part of the price-fixing period insisted that despite the breach of anti-competition law, passengers were not overcharged.

However, the former Aer Lingus chief executive condemned unreservedly anti-competitive conduct by a limited number of individuals in the company.

While maintaining that fuel surcharges are a legitimate way of recovering costs, the Dubliner added that this did not excuse the actions of BA employees.

But the Office of Fair Trading (OFT), the UKs competition watchdog, said that Mr Walsh was being disingenuous.

The body said it was implicit in the mere setting up of an illegal cartel that passengers would be ripped off.

An OFT spokesman said of BAs stance: They are being disingenuous. Cartels are illegal because they prevent competition. If you are fixing prices, customers dont get the cheapest price and they are being ripped off.

The OFT imposed a record fine of 121.5million (e180m) on BA. Later, the Department of Justice, its U.S. counterpart, said it would fine BA $300million (e220m).

In a strong condemnation, investigators described the actions as one of the largest and far-reaching conspiracies they had ever looked into.

The illegal price-fixing deal has affected about 18 million BA and six million Virgin Atlant ic long-haul passengers over an 18- month period.

Lawyers acting for passengers said they would be seeking hundreds of millions of pounds in compensation from the airlines, which had acted like robbers.

Virgin was given immunity from fines and criminal investigations both in the UK and the U.S. after it went to watchdogs and admitted its part in the affair.

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