A United Kingdom regulator yesterday fined British Airways Plc 121.5 million pounds (US$246 million) after the airline admitted colluding with a rival over surcharges on long-haul flights.

 

BA said it accepted the fine from the Office of Fair Trading and expected to be hit with another penalty from the United States Department of Justice later in the day.

 

The airline said the combined sum was likely to be consistent with the 350 million pounds it set aside in May to pay for any possible penalties resulting from a price-fixing investigation.

 

In a statement, BA said it admitted that between August 2004 and January 2006 it colluded with rival Virgin Atlantic over the surcharges, which were added to fares in response to rising oil prices.

 

Virgin Atlantic is not expected to face a fine because it reported the alleged misconduct to the Office of Fair Trading.

 

BA Chief Executive Willie Walsh said passengers had not been overcharged, but acknowledged that a "limited number of individuals" in the company had broken competition rules.

 

"Anti-competitive behavior is entirely unacceptable and we condemn it unreservedly," he said.

 

Authorities in Britain and the US have been investigating allegations of price-fixing on fuel surcharges since June 2006. A criminal investigation continues.

 

Over that time, fuel surcharges rose from about five pounds to about 60 pounds per ticket for a return long-haul flight on BA or Virgin.

 

Office of Fair Trading Chairman Philip Collins said the fine, the largest imposed by the watchdog, "will send an important message to corporate boards and business leaders."

 

(Shanghai Daily August 3, 2007)