British Airways fined for price-fixing
The tail of a British Airways aircraft. The carrier is being fined for price-fixing tickets.
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Kai Ryssdal: Airlines have been doing pretty well, but British Airways took quite a hit today. It's been been fined more than half a billion dollars for price-fixing.
Regulators on both sides of the pond levied the fines after a year-long investigation during which BA admitted colluding with a rival airline on how much extra to charge passengers to cover the rising cost of fuel. From London, Marketplace's Stephen Beard reports.
Stephen Beard: This is the biggest fine for a British company for breaking competition law.
British Airways colluded with its old rival, Virgin Atlantic, on six occasions. The two carriers secretly agreed to increase their fuel surcharges by the same amount.
BA's boss, Willie Walsh, wasn't running the airline at the time. Today, he denounced the price-fixing:
Willie Walsh: I condemn the actions of those very limited number of individuals who engaged in anti-competitive activities. It will not be tolerated. And I apologize for what this has done to British Airways
The authorities are more concerned about what it did to passengers. Together, the two airlines hiked their fuel surcharges from $10 per round trip to $120 — an increase of more than 1,000 percent.
In Washington, Bill Mercer of the Department of Justice said this was not a victimless crime:
Bill Mercer: During this conspiracy, any person who flew on a British Airways flight between the U.K. and the U.S. paid more for their airline tickets as a result of this illegal cartel.
An American lawyer is organizing a class-action lawsuit for BA passengers. There could be criminal prosecutions, too.
Perhaps most galling for British Airways: its old rival, Virgin, has been given immunity because it reported the collusion.
In London, this is Stephen Beard for Marketplace.