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BA probed over price-fix claim

BA and other airlines probed over price-fixing

British Airways (BA) and other unnamed airlines are being investigated by the British and American governments over allegations of price-fixing.

This morning the UK’s Office of Fair Trading (OFT) issued a statement saying it was conducting a criminal and a civil investigation into alleged price-fixing of fuel surcharges for long-haul passenger flights to and from the UK.

The statement followed an announcement earlier today from BA that the OFT and the United States Department of Justice were probing prices and fuel surcharges, and it was helping both in their investigation. During the probe, BA Commercial Director Martin George and Head of Communications Iain Burns have been given leave of absence.

‘Full compliance’

BA said its policy was to conduct business in full compliance with all applicable competition laws.

The other airlines involved have not been named. A spokesman for Sir Richard Branson’s airline Virgin Atlantic Airways said: ‘We cannot confirm that we are one of the airlines under investigation but we can say that we are assisting the OFT and the US Department of Justice with their inquiries.’

In February, European Commission (EC) officials raided the premises of BA and other airlines over alleged price-fixing.

‘Alleged cartel’

BA confirmed at the time that it had received a request for information from both the EC and the US Department of Justice ‘relating to alleged cartel activity involving BA and a number of other airlines and cargo operators’.

The EC said in February it had carried out ‘unannounced inspections’ at the various premises as it had ‘reason to believe’ the companies concerned may have violated a rule which prohibits practices such as price fixing.

Potential fine

If found guilty of operating a price-fixing or market-sharing cartel, an airline faces a fine of up to 10 per cent of its worldwide sales.

The OFT said its investigation was at an early stage and no assumption should be made that competition rules had been broken.

Last month BA announced annual profits of GBP 620 million – 21 per cent up on the previous year. Its fuel surcharge is currently costing passengers GBP 70 on a long-haul return trip.

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