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BA may face £350m collusion fine BA may face £350m collusion fine
(10 minutes later)
British Airways has said it has put aside £350m to cover possible fines over breaches of competition law. British Airways has put aside £350m to cover possible fines and legal action after it broke competition law.
The charge relates to a finding last year that it had discussed fuel surcharges with competitors. The costs relate to a finding last year that it had been discussing fuel surcharges with competitors.
The news came as BA said annual operating profits had slumped 13% to £602m after a spate of negative events.The news came as BA said annual operating profits had slumped 13% to £602m after a spate of negative events.
Thousands of flights were cancelled after a terror threat in August, with many more hit by severe fog over the Christmas period.Thousands of flights were cancelled after a terror threat in August, with many more hit by severe fog over the Christmas period.
And a proposed cabin crew strike was called off but not before thousands of passengers had cancelled reservations. And a proposed cabin crew strike was called off, but not before thousands of passengers had cancelled reservations.
'Completely unacceptable'
Details of the alleged price-fixing emerged in June last year.
And in October, BA's commercial director Martin George and communications chief Iain Burns - who had been on leave of absence since the probe began - quit the company.
The £350m put aside is to cover fines as well as any liability resulting from legal action over the rigging of fuel surcharge prices.
"Members of our staff breached our comprehensive policies on competition compliance rules," chief executive Willie Walsh told the BBC.
"I find that very regrettable and completely unacceptable".
The UK Office of Fair Trading and the US Department of Justice are still investigating the case, and criminal action could result.
'Frustrating''Frustrating'
Mr Walsh said the results were " strong" in what had been "a challenging year", which saw sales up 3.4% to £8.49bn in the year to 31 March,
Pre-tax profits fell 0.8% to £611m, better than analysts had expected.Pre-tax profits fell 0.8% to £611m, better than analysts had expected.
British Airways (BA) chief executive Willie Walsh said the results were " strong" in what had been "a challenging year", which saw sales up 3.4% to £8.49bn in the year to 31 March,
"We know at times it has been a frustrating year for our customers, caused by disruption and overly restrictive UK government security measures on hand baggage," he said."We know at times it has been a frustrating year for our customers, caused by disruption and overly restrictive UK government security measures on hand baggage," he said.
Details of the alleged price-fixing of fuel surcharges emerged in June last year.
And in October commercial director Martin George and communications chief Iain Burns - who had been on leave of absence since the probe began - quit the company.
The UK Office of Fair Trading and the US Department of Justice are looking at claims that BA had been informing other airlines of its fuel surcharge plans.
BA admitted it had contacted a competitor over fuel surcharges.
Takeover target
The August terror threat saw BA cancel 1,280 flights, and left BA with a hefty bill for hotels, catering and baggage recovery.The August terror threat saw BA cancel 1,280 flights, and left BA with a hefty bill for hotels, catering and baggage recovery.
Increased security restrictions introduced also meant the number of business passengers taking its flights fell in the following weeks.Increased security restrictions introduced also meant the number of business passengers taking its flights fell in the following weeks.
Last-gasp talks in January prevented a series of strikes, but the cancellations already made led to profits falling 72% between January and March.Last-gasp talks in January prevented a series of strikes, but the cancellations already made led to profits falling 72% between January and March.
Attractive
After the collapse of a private equity bid for Australia's national carrier Qantas, some analysts have tipped BA as a potential takeover target.After the collapse of a private equity bid for Australia's national carrier Qantas, some analysts have tipped BA as a potential takeover target.
Its shares rose 2.4% on Thursday as Goldman Sachs described it as the "jewel in the crown" in terms of its attractiveness to potential buyers.Its shares rose 2.4% on Thursday as Goldman Sachs described it as the "jewel in the crown" in terms of its attractiveness to potential buyers.
BA is also believed to be considering a bid for Spain's carrier, Iberia, in which it already owns a 10% stake.BA is also believed to be considering a bid for Spain's carrier, Iberia, in which it already owns a 10% stake.
Earlier this year the airline sold off its loss-making regional airline BA Connect as it tried to plug a hole in its £2.1bn pension deficit.Earlier this year the airline sold off its loss-making regional airline BA Connect as it tried to plug a hole in its £2.1bn pension deficit.
The airline also announced on Friday that it had ordered eight new short haul Airbus A320 planes for delivery between 2008 and 2010.The airline also announced on Friday that it had ordered eight new short haul Airbus A320 planes for delivery between 2008 and 2010.