BA anticipates collusion fine

18-05-2007

BA anticipates collusion fine
British Airways (BA) has revealed it has set aside £350 million in anticipation of possible fines it may face for price-fixing.

Its revelation comes as it announces a 13 per cent slump in annual operating profits.

The UK's Office of Fair Trading (OFT) and US department of justice are still investigating the carrier over allegations that it discussed fuel surcharges with its competitors in a breach of competition laws.

Two leading BA executives have already resigned over the claims, which emerged last June, and the airline could now face fines and legal action by regulators.

In a statement announcing its annual results BA said that it had "a long-standing, clear and comprehensive competition compliance policy" that it expected all its staff to comply with.

However the airline acknowledged that there had been "apparent" breaches of the policy.

"As a result it is now appropriate for the company to make a provision of £350 million in its full-year accounts, which represents the company's best estimate of the amounts that could be required to settle all known claims in relation to these matters," BA said.

After what BA chief executive Willie Walsh described as a "challenging year" the airline revealed that its operating profit slumped by £92 million to £602 million in the 12 months to March 31st.

Mr Walsh blamed a 5.5 per cent increase in operating costs for the fall and said that BA had been hit by "overly restrictive" security measures introduced by the government following last August's transatlantic terror scare. Thousands of flights were cancelled by the airline as a result of airport delays caused by stringent temporary procedures for hand baggage.

But the BA chief stressed the company had taken steps to ensure the "fundamentals" of the business were strong and had laid the foundations to deliver a ten per cent operating margin target by March 2008.

Action taken by BA over the year includes the disposal of its loss-making regional carrier BA Connect and moves to plug a £2.1 billion hole in its pension fund.

"We are on the threshold of a new era for our customers," insisted Mr Walsh, who emphasised that Heathrow airport's new terminal five building was just 313 days away.



Bookmark with:
Bookmark with: Digg Digg Bookmark with: Del.icio.us Delicious Bookmark with: Reddit Reddit Bookmark with: StumbleUpon StumbleUpon Bookmark with: Google Google Bookmark with: Technorati Technorati Bookmark with: Netvouz Netvouz

Latest News:

Search News
News Front Page
Accountancy / Tax
Advertising / PR
Armed Forces
Automotive
Aviation / Aerospace
Banking / Finance
Charities / Voluntary
Childcare / Youth
Construction / Property
Customer Services
Education / Training / Teaching
Emergency Services
Engineering / Electronics
Entertainment / TV / Theatre
Graduate Roles
Health / Beauty
Hotel / Catering / Restaurants
HR / Recruitment
Insurance / Pensions
International / Overseas
IT / Internet
Legal
Management / Business
Manufacturing / Industry
Media / New Media / Creative
Medical / Healthcare
Pharmaceutical Industry
Public Sector
Retail / Wholesale
Sales / Purchasing / Marketing
Science / Technology
Secretarial / PA / Admin
Skilled / Semi-skilled Manual
Telecommunications
Transport / Logistics
Travel / Tourism / Leisure