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BA gets £121.5m price-fixing fine BA gets £121.5m price-fixing fine
(about 1 hour later)
British Airways has been fined £121.5m after it admitted price fixing of fuel surcharges on long-haul flights. British Airways has been fined £121.5m after it admitted price-fixing of fuel surcharges on long-haul flights.
BA colluded with Virgin Atlantic over the surcharges, which were added in response to rising oil prices, the Office of Fair Trading (OFT) said.BA colluded with Virgin Atlantic over the surcharges, which were added in response to rising oil prices, the Office of Fair Trading (OFT) said.
The OFT and the US Department of Justice (DoJ) have been investigating the allegations since June last year.The OFT and the US Department of Justice (DoJ) have been investigating the allegations since June last year.
The airline said in May that it had set aside £350m to cover fines and the costs of legal action.The airline said in May that it had set aside £350m to cover fines and the costs of legal action.
Anti-competitive behaviour is entirely unacceptable and we condemn it unreservedly Willie Walsh, BA chairman Q&A: BA price-fixing probe Check BA's share priceAnti-competitive behaviour is entirely unacceptable and we condemn it unreservedly Willie Walsh, BA chairman Q&A: BA price-fixing probe Check BA's share price
The DoJ will announce how much it plans to fine BA later on Wednesday.The DoJ will announce how much it plans to fine BA later on Wednesday.
Virgin Atlantic has been given immunity after it reported BA's activity and is not expected to be fined, the OFT said.Virgin Atlantic has been given immunity after it reported BA's activity and is not expected to be fined, the OFT said.
The fine ends the civil case, but a criminal investigation is still continuing, and the OFT said no conclusions could be drawn about whether charges against individuals would be brought.The fine ends the civil case, but a criminal investigation is still continuing, and the OFT said no conclusions could be drawn about whether charges against individuals would be brought.
Last 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. Last October, BA's commercial director Martin George and communications chief Iain Burns - who had been on leave of absence since the inquiry began - quit the company.
'Important message''Important message'
BA had colluded with Virgin Atlantic on at least six occasions between August 2004 and January 2006, the OFT said, during which period surcharges rose from £5 to £60 per ticket. BA had colluded with Virgin Atlantic on at least six occasions between August 2004 and January 2006, the OFT said. During that time, surcharges rose from £5 to £60 per ticket.
BA's chief executive Willie Walsh said that passengers had not been overcharged because fuel surcharges were "a legitimate way of recovering costs".BA's chief executive Willie Walsh said that passengers had not been overcharged because fuel surcharges were "a legitimate way of recovering costs".
However, he acknowledged that the conduct of some of the carrier's employees had been wrong and could not be excused.However, he acknowledged that the conduct of some of the carrier's employees had been wrong and could not be excused.
This serves to remind companies of the substantial risks involved if they are found to engage in such behaviour Phillip CollinsChairman, OFT
"Anti-competitive behaviour is entirely unacceptable and we condemn it unreservedly," he said."Anti-competitive behaviour is entirely unacceptable and we condemn it unreservedly," he said.
"We have a long standing competition compliance policy which requires all staff to comply with the law at all times. I am satisfied that we have the right controls in place. However, it is deeply regrettable that some individuals ignored our policy." "We have a long-standing competition compliance policy which requires all staff to comply with the law at all times.
"I am satisfied that we have the right controls in place. However, it is deeply regrettable that some individuals ignored our policy."
OFT chairman Phillip Collins said that the hefty fine would "send an important message to corporate boards and business leaders about our intention to enforce the law, and serves to remind companies of the substantial risks involved if they are found to engage in such behaviour".OFT chairman Phillip Collins said that the hefty fine would "send an important message to corporate boards and business leaders about our intention to enforce the law, and serves to remind companies of the substantial risks involved if they are found to engage in such behaviour".
Virgin Atlantic said that it had informed the OFT as soon as its lawyers became made aware of the nature of contacts that had occurred between individuals from the two airlines.
"We take complying with competition laws extremely seriously and regret that contacts were made between the two companies," it said.
"As a criminal investigation is continuing, we are unable to give further details until the regulators publish their full findings."