BA chiefs charged over price-fixing

Click to follow
The Independent Online

Four past and present British Airways executives were today charged with "cartel offences" by the Office of Fair Trading (OFT) concerning the fixing of fuel surcharge prices on long-haul flights.

The OFT said the four, including former commercial director Martin George, were charged with "having dishonestly agreed with others to make or implement arrangements which directly or indirectly fixed the price for the supply in the UK of passenger air transport services by British Airways and Virgin Atlantic Airways".

The other three men are BA head of sales Andrew Crawley, former communications head Iain Burns and former UK and Ireland sales chief Alan Burnett.

The OFT said the charges related to the period between July 2004 and April 2006 "when the defendants were employed by BA".

They will appear at City of London Magistrates' Court on 24 September.

The charges have been brought under the Enterprise Act 2002. Under Section 188 of the Act it is an offence for individuals dishonestly to agree that businesses will engage in certain types of cartel activity, namely price-fixing, limiting supply or production, market-sharing and bid-rigging.

Individuals convicted of the cartel offence under the Enterprise Act may be sentenced to up to five years' imprisonment and/or an unlimited fine

UK and US authorities have already fined BA a total of around £270m over the fuel surcharge offences.

Mr George and Mr Burns resigned from BA in 2006, while Mr Burnett retired in the same year.

The four are part of a group of 10 past and present BA staff who have been refused immunity under a plea agreement between the airline and the US Department of Justice (DoJ) over the price-fixing.

The OFT fined BA £121.5m for colluding with Virgin Atlantic Airways on fuel surcharges on at least six occasions in the period 2004-06.

Virgin was granted immunity after bringing the matter to the attention of the OFT.

BA was also fined $300m (£150m) by the DoJ.

In February this year, BA and Virgin agreed to settle a US class-action lawsuit which a firm representing plaintiffs said could see the two carriers paying more than £100m to passengers affected by the price-fixing.

BA has said that about 11 million passengers, including seven million in the UK, were affected.

BA chief executive Willie Walsh said earlier this year that "any anti-competitive behaviour is to be condemned at BA or at other companies".

A spokesman for Mr Burns said: "At the time of these events, Iain Burns was the head of PR at British Airways with no responsibility for pricing decisions.

"Given his very high level of co-operation to the OFT, Iain is naturally disappointed with their decision. However, he hopes that it will allow this case to be fully analysed before a court and finally provide him with the opportunity to clear his name."