BA executives exit over long-haul fuel surcharges violation

Two senior British Airways executives quit yesterday after the airline revealed there had been a breach of its rules during the setting of its long-haul fuel surcharges earlier this year.

Martin George, the company's commercial director and an executive member of the board, resigned with immediate effect, conceding that "inappropriate conversations" may have taken place within his department, which were in breach of company rules. Iain Burns, BA's head of communications, also stepped down with immediate effect.

Mr George, who was paid £375,000 a year, stands to receive 12 months' pay in lieu of notice. Mr Burns is expected to receive six months' pay in lieu of his notice period.

The resignations came three and a half months after the Office of Fair Trading (OFT) and the US Department of Justice raided BA's offices and launched an investigation into allegations of price-fixing in the airline sector.

In particular, the OFT said it was exploring the possibility of collusion during the setting of long-haul fuel surcharges, which several airlines have begun charging over the past two years to compensate for the rapid rise in oil prices. The OFT inquiry is believed to have been prompted by a tip-off from BA's rival Virgin Atlantic.

Mr Burns and Mr George were sent on leave when the inquiry began in June. However, at the time, the BA chairman, Martin Broughton, said he was hopeful that he would have the pair back in their jobs, and the matter cleared up, very shortly.

In a letter to Mr Broughton yesterday, Mr George said it was with great regret he was resigning after 19 years with the company.

"I now recognise that, within my department, there may have been inappropriate conversations in violation of company policy in relation to long-haul fuel surcharges," he wrote. "I was not involved in such conversations. Although the board of BA have not found that I have behaved in a dishonest way, I fully recognise my responsibilities as head of department and as a board director.

"As you know, becoming a board member of British Airways has been the highlight of my career so far. I remain committed to doing what I can in the interests of the airline, to which I have dedicated my last 19 working years. I have always taken my responsibilities as a director and board member very seriously and I therefore depart with deep regret, whilst believing that departing is, in these circumstances and for these reasons, nevertheless, the right course."

Mr George is to be replaced with immediate effect by Robert Boyle, the airline's director of planning. Thomas Coops, a former communications director at Abbey National, will take over from Mr Burns on an interim basis. BA said its priority was to ensure it was abiding by all relevant competition rules, adding it was continuing to assist the regulators with their investigations. It admitted there had been a breach of its internal rules.