U.S., Britain Probe Airline Price Fixing

LONDON – British Airways was at the center of a transatlantic investigation yesterday into alleged price fixing.The inquiry, launched by the Office of Fair Trading in London and the Department of Justice in Washington, is into fuel surcharges imposed on passengers by BA and other unnamed airlines.Details of the investigation were disclosed by BA that also announced that Martin George, its commercial director and Iain Burns, its head of communications, had been given leave of absence.Under the 1998 Competition Act, BA could face a fine of $1.5 billion, equivalent to 10% of its turnover.Senior executives face a five-year jail term and the company an unlimited fine under the Enterprise Act 2002.The inquiry centers on levies imposed by airlines as they sought to cover the rising cost of aviation fuel.The first surcharges were announced by BA on May 13 2004, when it added a $4.50 charge. There have been six increases since, with the last in April adding $64 to the cost of a one-way ticket. Virgin Atlantic announced its $4.50 surcharge six days after BA. Apart from November 21 last year, when it reduced the levy to $46, it has largely stayed in step with its rival.Other carriers, including American and United have imposed surcharges, though not at the same time. Their current levy is $68.The OFT said it was investigating BA over “alleged price coordination” in relation to long-haul flights to and from Britain.It added: “The investigation is at an early stage so no assumption can be made at this stage as to whether there has been an infringement of competition law.”The OFT declined to identify the other airlines involved. But Virgin Atlantic said it was helping the OFT and the American justice department in their inquiries.American Airlines – like British Airways a member of the Oneworld Alliance – said it had received a subpoena from Department of Justice, but had been told it was not the subject of the investigation.

U.S., Britain Probe Airline Price Fixing

U.S., Britain Probe Airline Price Fixing

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