BA executives on trial for alleged price fixing
LONDON – Millions of airline passengers paid inflated ticket charges after British Airways and Virgin Atlantic secretly rigged prices, a British court has heard.
The rival carriers allegedly conspired to fix passenger fuel surcharges to rake in hundreds of millions of pounds in a desperate bid to cover soaring oil prices, the UK Daily Mail reports.
Senior executives at the two airlines were said to have hammered out the deals during secret telephone calls, telling each other, ‘This is a conversation we aren’t going to have.’
The controversial surcharges proved lucrative for both carriers. BA took £64million in the first year and its forecasts showed it hoped to make £201million as it increased the charges.
The alleged cartel ran for almost two years, between July 2004 and April 2006, and affected millions of long-haul passengers.
The alleged cartel came unstuck in March 2006 when Virgin turned whistle-blower in exchange for immunity from prosecution, London’s Southwark Crown Court heard. The trial of four BA executives is continuing.
In a twist last week, Cathay Pacific turned “whistleblower†on Virgin Atlantic to prompt a price fixing probe on the London to Hong Kong route by the UK Office of Fair Trading.
The action by the Hong Kong carrier – a oneworld partner of British Airways – means that it will be immune from any penalties that may arise from the case.
The OFT made clear that “at this stage it should not be assumed that the parties involved have broken the lawâ€.
The OFT will decide if the law has been breached after it has reviewed any responses to the statement of objections.
Virgin pledged to “robustly defend itself†against the allegations.
Ian Jarrett
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