BA in price-fixing probe

Edinburgh
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By Colin Baker in Edinburgh

The UK’s Office of Fair Trading (OFT) says it is conducting both criminal and civil investigations, adding that its investigation is at an early stage. “No assumption should be made that there has been an infringement of competition law,” it says.

BA confirmed that the OFT and the US Department of Justice are “investigating alleged cartel activity involving BA and other airlines” relating to ticket pricing including fuel surcharges. The carrier immediately gave leave of absence to commercial director Martin George and head of communications Iain Burns during the investigation.

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BA says it is assisting the autorities with their investigations
No other airline has said it is being investigated. Virgin Atlantic Airways will only say that it is “assisting the OFT with its enquiries”, while American and United Airlines say they have been contacted by the US authorities but have been told they are not the targets of the investigation. No other European carrier has said it is involved. However, one senior London-based aviation lawyer notes: “You need more than one airline for price fixing.”

The lawyer explains that the investigation is likely to be related to a global investigation into air cargo fuel surcharges launched earlier this year. “It is too coincidental not to be linked,” he says, adding that it is likely that something has come to light in the cargo investigation, and that another carrier has provided information to the authorities in return for lenient treatment.

He adds that the cargo investigation seems to have been launched when a major European carrier went to the European Commission, again hoping for lenient treatment, when it became worried it may have infringed competition laws.

The BA investigation is expected to last around 18 months. If BA is found guilty it could face the prospect of civil and criminal cases in both the UK and the USA, while there is even the possibility of BA personnel being extradited to the USA under an extradition treaty signed by the two countries in 2003. ■