Willie Walsh just can't catch a break. The diminutive chief executive of British Airways took over nine months ago and is already involved in high-profile regulatory activity. Last week, shares in Britain's national carrier slumped as it emerged it was at the centre of a criminal and civil investigation by UK and US authorities into fuel surcharges, and that its offices had been raided.
So much for Mr Walsh's hopes of a trouble-free summer after last year's wildcat strikes and the fiasco involving BA's caterer, Gate Gourmet.
The Office of Fair Trading stressed that "no assumption should be made that there has been an infringement of competition law". In other words, BA may have done absolutely nothing wrong.
But the market was not easily pacified. The rumour mill cranked into action as the City tried to fill in gaps in the scant public information - and it tended to assume the worst.
"Everyone is sitting here thinking 'how bad is this news?'," said one analyst, who asks not to be named. "Well, you know it's not good news. Would, for instance, you sell the shares? Well, again, you wouldn't buy them."
What is known is this: the OFT and the US Department of Justice are investigating alleged cartel activity concerning fuel surcharges on long-haul tickets. Those involved are BA, Virgin, United and American Airlines, the only carriers allowed to fly transatlantic flights from Heathrow. All are co-operating with the inquiry, although the two US carriers added that they had not been raided.
But while the investigation may be taking in all four airlines, the focus is on BA. For a start, as far as anyone knows for sure, it was the only one to be raided. Also, two senior members of staff were suspended: the airline's commercial director, Martin George, and Iain Burns, head of communications. BA said the two had been "given a leave of absence during the investigation" but declined to go into detail.
Part of Mr George's role at BA is to decide changes to fuel surcharges, but Mr Burns's relevance to the inquiry is less obvious. As BA's PR man, he spent most of last week entertaining journalists at a World Cup jolly. However, reports have come to light that the authorities are looking at alleged taped phone conversations between him and Virgin's public relations department.
But, aside from why Mr Burns was suspended, another, more pertinent question remains: why did the OFT decide to investigate in the first place? One theory is that its action was triggered by a global probe, launched in February, into price-fixing in the air cargo sector. The other is that there is a whistleblower at Virgin, a depressing indication of the possible outcome. If the case against BA is proved, it could face fines of around £900m, while individuals found guilty of breaking the law face up to five years in prison.
The investigation is expected to go on for months, and few doubt there will be more turbulence en route. Mr Walsh, it seems, is in for the very opposite of a trouble-free summer.Reuse content