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BA bosses in price fixing charge

08 August 2008

Four British Airways executives are facing prosecution for their part in a pact to fix fuel surcharges. If convicted, each could face a jail sentence of up to five years.

In only the second prosecution of its kind, four current and former executives of British Airways, including the present head of sales, have been charged under the cartel offence provisions of the Enterprise Act.

The men are accused of having dishonestly agreed with Virgin Atlantic to fix fuel surcharge prices between July 2004 and April 2006. This period saw fuel surcharges for a typical BA or Virgin Atlantic long-haul return flight rise from £5 to £60 per ticket.

Estimates indicate that some 11 million people – who may now be able to claim a partial refund through a US class action -- were affected by the scam. If found guilty the executives could each face prison sentences of up to five years.

The OFT hope that the total civil and criminal immunity afforded to Virgin Atlantic and their employees will encourage other companies to blow the whistle on cartels. At the same time, the high fine (some £121.5 million) and individual prosecutions demonstrate how seriously they are treating hardcore infringements of competition law, such as price fixing.

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