'Virgin and BA fixed surcharges at cricket match at Branson's house'

Sir Richard Branson told a senior Virgin Atlantic executive to "sound out his contact" at BA over potential changes to fuel surcharges, a court heard yesterday.

Senior BA and Virgin executives "sidestepped the proper process" and secretly fixed the cost of fuel surcharges at a cricket match between the two airlines at Sir Richard's Oxfordshire home in September 2005, Southwark Crown Court in London was told.

Sir Richard, Virgin's president, wanted to know if BA would follow suit if he introduced a variable fuel surcharge which would lead to upper class passengers paying a higher fuel surcharge than those in standard class. William Boulter, Virgin's commercial director in 2005, told prosecutors he was "reluctant" at first because he felt it was a much more sophisticated conversation than those that had formed the basis of the illegal cartel between the two airlines up to this point, the court was told.

Richard Latham, QC, for the prosecution, told the jury that Mr Boulter spoke to his BA contact, Alan Burnett, who led sales in the UK and Ireland, at the cricket match, which BA won, on 4 September 2005. The conversation also involved collusion over Virgin's next fuel surcharge rise, from £24 to £30 each way, on 6 September 2005, with BA following suit two days later, Mr Latham said.

Virgin's director of corporate affairs, Paul Moore, then warned PR staff not to release any of the publicity photos taken at the match to the press. In response to an internal email asking about the photos, he wrote: "Please don't put anything up on the intranet!!!!!!!!!!!!!!!!!!!

"If BA follow our surcharge it might not look too clever to show us fraternising two days before." When the photos were released two weeks later, he added: "Can we say it happened recently, without the date?"

Three former executives and one current BA executive have denied illegally fixing the price of fuel surcharges with Virgin executives between 1 July 2004, and 20 April 2006. Virgin executives have been granted immunity from charges for "whistle blowing" on the alleged cartel. The case continues.