OFT halves BA fuel surcharge fine

A record fine imposed on British Airways for colluding with rival Virgin Atlantic on fuel surcharges was today cut by more than half to £58.5 million.

The Office of Fair Trading (OFT) said the new penalty placed greater value on the level of BA's co-operation in the investigation into pricing on long-haul flights between August 2004 and January 2006.

In August 2007, the regulator fined BA £121.5 million after Virgin effectively blew the whistle on what had been going on between the two airlines. Under the OFT's leniency policy, Virgin was not fined.

While BA agreed to pay the £121 million fine under an early resolution agreement, its final penalty was not confirmed by the OFT until today.

It follows a statement of objections notice published by the OFT in November, under which parties are invited to make representations before the OFT's decision is announced.

The verdict comes a year after the collapse of criminal proceedings brought by the OFT against a number of former BA executives.

A spokesman for BA: "We are pleased that this matter, which concerned events between 2004 and 2006, has been settled."

Ali Nikpay, OFT senior director of cartels and criminal enforcement, said the penalty sent out a message that co-ordinating pricing through the exchange of confidential information between competitors was unlawful.

He added: "The size of the fine underlines that it is important for companies to take steps to ensure that they have an effective compliance culture.

"The fine would have been higher still but for the co-operation provided by BA throughout the OFT's investigation. Without this, together with BA's admission of the infringement, the case would have taken considerably longer to resolve."

PA