07/08/2008

BA Bosses Charged With Price Fixing

Four men have been charged with cartel offences in connection with a criminal investigation into price-fixing.

The Office of Fair Trading (OFT), which has brought the charges, say that the men are charged with price-fixing of fuel surcharges for long haul flights.

BA's Head of Sales Andrew Crawley and ex Commercial Director Martin George are due to appear before City of London Magistrates Court on 24 September.

Communications Head Iain Burns and Former UK and Ireland Sales Chief Alan Burnett will also stand before court.

Mr George and Mr Burns resigned from BA in 2006, while Mr Burnett retired in the same year.

The men are accused of "having dishonestly agreed with others to make or implement arrangements which directly or indirectly fixed the price for the supply in the UK of passenger air transport services by BA and Virgin Atlantic" between July 2004 and April 2006.

If convicted, the four could receive a prison sentence of up to five years, as well as an unlimited fine.

The OFT has already fined BA £121.5m for colluding with the rival airline on fuel surcharges at least six times between 2004-06 - the biggest ever imposed by the OFT for a breach of competition law.

In counterpoint, Virgin was granted immunity after bringing the matter to the attention of the OFT.

BA has also been fined $300 by the US Department of Justice over the matter after a guilty plea.

BA said that around 11 million passengers have been affected by the price fixing in the 21-month period.

Passengers who travelled on flights with either of the airlines during the relevant time period can apply for a refund worth about one-third of the fuel surcharge, via a special website.

Under competition law, tipping off a rival about a price change or agreeing a price, is illegal.

The OFT operates a leniency programme for companies and other individual who wish to confess to cartel conduct.

BA Chief Executive, Willie Walsh, said earlier this year that anti-competitive behaviour was "to be condemned".

(DS)

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