BA accused of cartel conspiracy

24-08-2006

British Airways (BA) has admitted it faces investigation from both the UK and US governments regarding price-fixing throughout the transatlantic aviation industry.

Both the British Office of Fair Trading (OFT) and the US Department of Justice (DoJ) are involved in the investigation, described by the OFT as "both criminal and civil", into passenger ticket price rises and potential overpricing of fuel surcharges following recent energy price hikes.

"British Airways' policy is to conduct its business in full compliance with all applicable competition laws," BA said in a statement.

"British Airways is assisting the OFT and DoJ with their investigations. Martin George, commercial director, and Iain Burns, head of communications, have been given leave of absence during the investigation."

American Airlines and Virgin Atlantic has both said they are helping regulators with their price probe, which alleges that airlines are operating what amounts to a cartel of companies, motivated by profit, deliberately driving prices above market value.

"We are aware of the investigation and are assisting with inquiries," a Virgin Atlantic spokesman said.

BA shares responded negatively to today's revelations, falling off by nearly five per cent of their starting value in early morning trading.

The company recorded booming annual profits of £620 million, a 21 per cent improvement that allowed BA to provide its workers with a £48 million bonus.


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