The inside track on airline price-fixing

There are actually three investigations:

1. The probe into transatlantic passenger fuel surcharges involving collusion between British Airways and Virgin Atlantic.

2. The global probe into the fixing of air cargo fuel surcharges.

3. A US investigation into the alleged price-fixing of fares by Korean Air with other carriers on flights between Korea and the US.

Details of the BA-Virgin discussions are reprinted here:

Summary Statement of Facts

These are the essential matters admitted by BA as to its infringement of civil competition law. Neither the names nor positions of any individuals involved directly or indirectly in the contacts are or will be disclosed by BA in view of the OFT's ongoing criminal investigation. Communications were made by a limited number of individuals.

Introduction of the PFS, May 2004

1. The introduction by each of BA and VAA of the long-haul passenger fuel surcharge ("PFS") in May 2004 is not alleged to have been the subject of collusive contacts.

First Increase, August 2004

2. BA and VAA exchanged information on Friday 6 August 2004 regarding the intentions of their respective organisations to increase the PFS. BA told VAA of BA's intention to increase its PFS to £6.
3. Thereafter, on Monday 9 August 2004, both BA and VAA announced increases in their respective PFS to £6, as they had discussed, with effect from 11 August 2004.

Second Increase, October 2004

4. BA understands that there may have been attempts by VAA to contact BA prior to the second increase, but these were not successful.
5. BA announced on 8 October 2004 an increase in its PFS to £10. VAA announced a corresponding increase in its PFS to £10 on the same date.

Third Increase, March 2005

6. In two sets of calls on 21 March 2005, BA and VAA exchanged information concerning proposed increases in their respective organisations' PFS. BA informed VAA that BA intended to increase its PFS to £16. VAA confirmed to BA the timing and amount of the PFS increase which VAA was going to announce.
7. Later on 21 March 2005 VAA announced to the press an increase in its PFS to £16 with effect from 24 March, as had been discussed. On the following day, BA announced an increase in its PFS by the same amount with effect from 28 March 2005.

Fourth Increase, June 2005

8. BA informed VAA on 23 June 2005 that BA was going to announce the following morning an increase in its PFS to £24.
9. On Friday 24 June 2005 BA announced an increase in its PFS to £24, as BA had informed VAA, with effect from 27 June 2005. Later the same day, VAA announced an identical increase in its PFS to £24.
10. An email was sent from VAA to BA shortly before VAA's announcement, to which BA replied early the following morning.

Fifth Increase, September 2005

11. On 5 September 2005, VAA informed BA during a telephone call that VAA intended to increase its PFS and to be the first to announce the increase on this occasion. It is likely that VAA informed BA that VAA would increase its PFS specifically to £30.
12. On 6 September 2005 VAA announced an increase in its PFS to £30 with effect from 7 September, as VAA had informed BA. On 8 September 2005, BA announced an increase in its PFS to £30, with effect from 12 September 2005.

VAA Reduction, November 2005

13. VAA informed BA on 18 November 2005 that VAA was about to announce a reduction in its PFS to £25.
14. Shortly afterwards, VAA announced a reduction in its PFS to £25, as VA had informed BA.
15. A further contact from VAA to BA relating to this reduction took place following the announcement.

VAA Increase, January 2006

16. VAA informed BA on 6 January 2006 that VAA intended to increase its PFS to £30.
17. Later that same day VAA announced an increase in its PFS to £30, as VAA had forewarned BA. BA did not adjust the level of its PFS in response.