BA received a severe £121.5 million ($243 million) rap this morning from the UK’s Office of Fair Trading and it seems likely to take another multi-million hit later today when the US Department of Justice dishes out its part of the fine. BA put aside £350 million in anticipation of the fines a few weeks ago which is apparently enough to cover both these fines and any civil litigation that may follow.
This first hints of a price-fixing scandal first emerged last year when Virgin Atlantic blew the whistle. By being the one to “fess up” (as a radio journalist put it this morning) Virgin receives immunity from the fine.
BA chief Willie Walsh, who vigorously condemned the role a very limited number of his staff played in the affair, said on the UK’s Radio 4 programme this morning that he would have blown the whistle had he uncovered such activity in his airline.
Today’s announcement sends out the strongest signal possible that the authorities are taking an extremely dim and aggressive view on such activity. Another investigation, this time on a global scale, is running in parallel into allegations of air cargo fuel surcharge price-fixing.
Lufthansa has already put aside millions in case it is fined. More multi-million dollar fines could soon be on the way.
For a further analysis of fuel surcharges read our recent story.