British Airways (BA) said it's been fined 121.5 million pounds ($247 million) by the U.K.
Office of Fair Trading (OFT) after it admitted in May it had colluded with rival
Virgin Atlantic Airways to fix passenger fuel surcharges on long-haul flights
between August 2004 and January 2006.
The U.K. regulator said Wednesday that BA employees on at least six occasions discussed the level of surcharges with their competitor. It started an investigation last year after Virgin Atlantic employees came forward with information about the price fixing.
As the one who blew the whistle Virgin Atlantic has qualified for conditional immunity and as a result has not been required to pay a penalty.
BA Chief
Executive Willie Walsh said in a statement he wanted to reassure the airline's
passengers that "they were not overcharged." He reiterated that fuel surcharges
are "a legitimate way of covering costs." If this really is a legitimate way of covering costs and no passengers were overcharged, then why did the OFT find that they were fixing prices. What is the point of fixing prices with your competitor if there's no benefit to either companies? Something doesn't add up here.
The OFT has the power to fine companies as much as 10% of their world-wide sales for price-fixing and other anti-competitive conduct. Based on these guidelines, the fine represents a bit more than 1% of annual group revenue, BA said.
Good move, Virgin Atlantic. Perhaps this is their response to BA when they removed a shot of Virgin Atlantic boss Sir Richard Branson from the in-flight version of the James Bond movie Casino Royale. Oh, I can't wait to see what BA's next move is.
The OFT has the power to fine companies as much as 10% of their world-wide sales for price-fixing and other anti-competitive conduct. Based on these guidelines, the fine represents a bit more than 1% of annual group revenue, BA said.
Good move, Virgin Atlantic. Perhaps this is their response to BA when they removed a shot of Virgin Atlantic boss Sir Richard Branson from the in-flight version of the James Bond movie Casino Royale. Oh, I can't wait to see what BA's next move is.
