Four British Airways executives charged with price fixing

Friday, August 8, 2008

Four current and former British Airways (BA) employees have been charged with price fixing by the United Kingdom's Office of Fair Trading (OFT). They are the first employees of a major UK company to be prosecuted for this offense.

BA have already been fined a record £270 million for their part in the scheme by authorities in both Britain and the United States. On at least six occasions, BA and Virgin Atlantic agreed to illegally fix fuel surcharge prices. BA have also paid US$136 million to settle a US class action by passengers affected by the crimes. Virgin was not prosecuted as the OFT granted the company immunity in exchange for being the whistle blower.

As part of a plea bargain made by the airline and the US Department of Justice (DoJ), some immunity was granted against prosecution of individuals, but ten were not granted this immunity. Three former and one current executive at BA from those ten are the men charged under the Enterprise Act 2002.

The current employee is head of sales Andrew Crawley, while the three others are ex-commercial director Martin George, ex-head of communications Iain Burns and former head of UK sales Alan Burnett. Burns and George both resigned in 2006, while Burnett retired in the same year.

There has only ever been one comparable case, involving industrial oil hose price-fixing, but this never went to trial as the defendants pled guilty. Therefore, this may become the first trial of its kind as well as the first major prosecution.

BA was also fined US$300 million recently by the DoJ for a similar deal with Korean Air.

BA CEO Willie Walsh said earlier this year that "any anti-competitive behaviour is to be condemned at BA or at other companies."

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Sources

"British Airways four charged with criminal price-fixing" — The Times, August 8, 2008
"British Airways executives to be tried for price-fixing" — Agence France-Presse, August 7, 2008

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