BA Fuel Surcharge 'Price-Fixing' Fine Halved
British Airways has had its record fine for colluding with rival Virgin Atlantic over passenger fuel surcharges halved by the Office of Fair Trading (OFT).
BA has been ordered to pay £58.5m instead of £121.5m its part in the price fixing.
The OFT has said fine had been re-assessed because of BA's co-operation into its investigation.
BA and Virgin Atlantic were engaged in anti-competitive practices in relation to the pricing of passenger fuel surcharges between August 2004 and January 2006.
The two airlines co-ordinated their surcharge pricing on long-haul flights to and from the UK through the exchange of pricing and other commercially sensitive information.
But as Virgin Atlantic brought the matter to the OFT's attention, Richard Branson's airline was not fined under the watchdog's leniency policy.
Ali Nikpay, OFT Senior Director of Cartels and Criminal Enforcement, said: "This decision brings an end to this investigation and sends out a strong message that co-ordinating pricing through the exchange of confidential information between competitors is unlawful.
"The size of the fine underlines that it is important for companies to take steps to ensure that they have an effective compliance culture."
BA, whose parent company International Airlines Group made £425m in pre-tax profit in 2011, welcomed the OFT's decision.
A spokesman said: "We are pleased that this matter, which concerned events between 2004 and 2006, has been settled."
The rivalry between BA and Virgin Atlantic intensified earlier this week when Virgin said it would appeal against a decision made by the European Commission to accept BMI's takeover by BA.
what do you think?
Far more serious than fuel surcharge agreements are code-shares, as these mean that when you book you have no real idea which airline will actually be carrying you. It can affect passengers badly. For example, if you fly BA one way and then Iberia on the return, you will suddenly find that you have to pay for onboard refreshments. Yet the OFT does nothing about code shares.