British Airways now faces US lawsuit over price fixing claims
Reports yesterday in the London Guardian reveal that the legal issues related to British Airways and allegations of its involvement in an alleged price-fixing cartel, were upgraded over the weekend with news that a potentially extremely expensive class action law suit has been filed in the US.
US law firm Cohen, Milstein, Hausfeld and Toll was already compiling a list of complainants in a similar case involving surcharges levied on cargo flights, but now it has filed a suit against BA, Virgin Atlantic and other unnamed airlines for operating a what it describes as “a global conspiracy to fix, raise, maintain and/or stabilise prices for long-haul passenger flights to and from the UK”.
If successful, the lawsuit which could see plaintiffs recover three times their losses as compensation came as it emerged that the FBI raided British Airways’ New York offices on June 13, the same day as fellow investigators from the Office of Fair Trading entered the airline’s Heathrow headquarters.
Last Thursday, British Airways shocked London’s financial City by admitting it is under investigation by the Department of Justice and the Office of Fair Treading over allegations that it has colluded in the fixing of fuel surcharges on long-haul flights.
It is understood that the enquiry is taking place after a tip-off to the Office of Fair Trading by Sir Richard Branson’s Virgin after the airline was “sounded out” by British Airways about raising the levy.
Virgin Atlantic is co-operating with the inquiry, which is likely to overshadow the release of its annual results today, which are expected to show an increase in profits and record passenger numbers.
In the meantime, British Airways has placed two of its executives, Commercial Director Martin George and Head of Communications Iain Burns on leave of absence during the investigation.
American Airlines and United Airlines are both helping the investigation although both have been at pains to stress they are not the focus of the inquiry.
The setting of fuel surcharges on cargo flights has been the subject of an investigation by the Department of Justice, the European Commission and regulators in Asia since February.
Report by The Mole
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