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Published on Monday, June 26, 2006

BA and Virgin now face US lawsuit over price fixing claims

British Airways, Virgin Atlantic and other unnamed airlines now face a potentially expensive class action lawsuit being filed in the US.

According to reports in the UK business press today, law firm Cohen, Milstein, Hausfeld and Toll has been compiling a list of complainants in a similar case which involved surcharges on cargo flights.

Now the firm has filed suit against BA, Virgin and other airlines for operating 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 could see plaintiffs recoup three times their losses as compensation.

The Guardian’s report also claims that the FBI raided BA's New York offices on June 13, the same day as investigators from the Office of Fair Trading entered the airline's Heathrow headquarters.

BA and Virgin refused to comment on these latest revelations.

Last Thursday, BA’s share price dropped after it was revealed that it was under investigation by the Department of Justice and the OFT over allegations over ‘cartel activity’.

BA announced it had placed its commercial director Martin George and head of communications Iain Burns on leave of absence during the investigation.

The inquiry is now understood to have followed a tip-off by Virgin after the airline was allegedly "sounded out" by BA about raising the levy.

Virgin said it is co-operating fully with the investigation.

American Airlines and United Airlines said they are also assisting with investigations but stressed they are not the focus of the inquiry.

By Bev Fearis

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  • True to form, Virgin "rats them out"

    If these allegations prove to be true, who at BA could have been so stupid as to have "sounded out" VS of all competitors about an increase in the fuel surcharge?

    By Michael Mudge, Tuesday, June 27, 2006

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