BA Fine Over Price Fixing
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Fargoo, Let me try again.
If our Company's employees insist on posting negative messages about the company on here or other sites, they shouldn't be surprised if the numbers point in a southerly direction each quarter. After all, would you invest in a Ratner style customer relations business?
So, where was your bonus? Same place as mine - talked down perhaps by people who should know better?
Oh, if I didn't get the lingo quite right, then apologies. Perhaps I'll get access to a posh school like you 'n' yours in another life. x
Appaddyinuk - well I am too. However I will never bite the hand that feeds me. I'm sorry if you feel passengers want to spit at you, frankly, I'd be surprised if they really did feel that way but understand that T1 could press the patience of the Pope and would be nervous in your boots too.
Even so, why would you gain pleasure from BA getting any form of a kicking? Surely a good BA means more money on the table for all of us and ....?
Perhaps I'm merely a simple soul.
If our Company's employees insist on posting negative messages about the company on here or other sites, they shouldn't be surprised if the numbers point in a southerly direction each quarter. After all, would you invest in a Ratner style customer relations business?
So, where was your bonus? Same place as mine - talked down perhaps by people who should know better?
Oh, if I didn't get the lingo quite right, then apologies. Perhaps I'll get access to a posh school like you 'n' yours in another life. x
Appaddyinuk - well I am too. However I will never bite the hand that feeds me. I'm sorry if you feel passengers want to spit at you, frankly, I'd be surprised if they really did feel that way but understand that T1 could press the patience of the Pope and would be nervous in your boots too.
Even so, why would you gain pleasure from BA getting any form of a kicking? Surely a good BA means more money on the table for all of us and ....?
Perhaps I'm merely a simple soul.
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Price-fixing
My sole knowledge of the aviation industry comes from being one of the SLF from time to time, so my question may seem a little naive to the many experts whose words of wisdon I read on this forum, but here goes anyway.
Would it not be rather more just if, instead of being made to pay millions of pounds and millions of dollars to various government departments on both sides of the Atlantic, BA was forced to trace all the passengers who had paid these inflated prices and repay them their excess fares.
This would surely punish them financially and also by imposing the probably expensive task of paying thousands of much smaller amounts to the affected passengers. It would also, in my probably simplistic view, be a far greater example of justice being seen to be done.
Before you ask, yes, my wife and I probably are two of the affected passengers although as I don't know the period during which the offence took place I cannot be certain.
L9172
Would it not be rather more just if, instead of being made to pay millions of pounds and millions of dollars to various government departments on both sides of the Atlantic, BA was forced to trace all the passengers who had paid these inflated prices and repay them their excess fares.
This would surely punish them financially and also by imposing the probably expensive task of paying thousands of much smaller amounts to the affected passengers. It would also, in my probably simplistic view, be a far greater example of justice being seen to be done.
Before you ask, yes, my wife and I probably are two of the affected passengers although as I don't know the period during which the offence took place I cannot be certain.
L9172
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The silly thing about this is that BA and Virgin would have put up fuel surcharges in more or less the way they did without any collusion.
Has anyone seem the Bearded One today or is he hiding in his tax haven ? Virgin's sycophantic acloyte who has been on the telly all day has been looking very shifty.
If BA want to get their own back on the USA dont buy Boeing for the long haul replacement.
Has anyone seem the Bearded One today or is he hiding in his tax haven ? Virgin's sycophantic acloyte who has been on the telly all day has been looking very shifty.
If BA want to get their own back on the USA dont buy Boeing for the long haul replacement.
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OFT fines BA £121m for price-fixing
By Michael Peel and Kevin Done in London and Stephanie Kirchgaessner in Washington
Published: July 31 2007 22:58 | Last updated: August 1 2007 14:47
British Airways was on Wednesday hit by a record £121.5m fine from the UK Office of Fair Trading for price-fixing in transatlantic passenger and worldwide cargo fuel surcharges.
The OFT said BA admitted that between August 2004 and January 2006, it colluded with Virgin Atlantic over surcharges that were added to ticket prices in response to rising oil prices. Over that period, the surcharges rose from £5 to £60 a ticket for a typical BA or Virgin Atlantic long-haul return flight.
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Virgin Atlantic is not expected to pay any penalty because it came forward to the OFT with information about price fixing. BA admitted in May that it had breached its own rules covering its compliance with competition law regarding fuel surcharges.
The penalty is the highest ever imposed by the OFT for infringements of competition law.
Philip Collins, OFT chairman, said: “This case, and the substantial penalty imposed, will send an important message to corporate boards and business leaders about our intention to enforce the law, and serves to remind companies of the substantial risks involved if they are found to engage in such behaviour.”
Willie Walsh, BA chief executive, said in a statement: ”I want to reassure our passengers that they were not overcharged. Fuel surcharges are a legitimate way of recovering costs.
”However this does not in any way excuse the anti competitive conduct by a very limited number of individuals within British Airways. Anti-competitive behaviour is entirely unacceptable and we condemn it unreservedly.”
The OFT investigation was conducted in parallel with a similar case brought by the US Department of Justice. The investigations were separate but the two agencies have consulted each other closely.
The DoJ action would cover allegations of illegal price-fixing of long-haul fuel surcharges on air cargo and a separate probe into alleged price-fixing of fuel surcharges on passenger fares, one person familiar with the case said.
Combined, the two investigations could result in BA being fined around £350m. The airline said on Wednesday that figure was consistent with a provision that it has already set aside and added that it was in plea negotiations with the US regulator.
The DoJ fine is expected to be announced later on Wednesday.
The OFT’s criminal probe into the allegations will continue.
The regulator’s civil powers allow it to fine companies up to 10 per cent of their worldwide sales, which in BA’s case reached £8.5bn last year.
BA faces further investigations over the cargo case in Brussels, Australia, Canada, New Zealand and South Africa, as well as civil litigation in the US, Australia and Canada. The DoJ and OFT could also take action against individuals allegedly involved in the passenger and cargo cases.
The gravity of the price-fixing allegations for both BA and some of its staff became apparent last October, when Martin George, previously seen as a candidate to become chief executive, resigned as commercial director over the fall-out from the passenger surcharges case. Kingsley Napley, Mr George’s law firm, declined to comment on Tuesday.
European and US antitrust officials first raided the offices of British Airways, Lufthansa, Air France-KLM, Cargolux and other air cargo companies as part of a global cartel probe in February last year.
In September, Germany’s Lufthansa said it had agreed to pay $85m (£41.8m) to settle class-action lawsuits pending in the US.
FT.com
By Michael Peel and Kevin Done in London and Stephanie Kirchgaessner in Washington
Published: July 31 2007 22:58 | Last updated: August 1 2007 14:47
British Airways was on Wednesday hit by a record £121.5m fine from the UK Office of Fair Trading for price-fixing in transatlantic passenger and worldwide cargo fuel surcharges.
The OFT said BA admitted that between August 2004 and January 2006, it colluded with Virgin Atlantic over surcharges that were added to ticket prices in response to rising oil prices. Over that period, the surcharges rose from £5 to £60 a ticket for a typical BA or Virgin Atlantic long-haul return flight.
ADVERTISEMENT
Virgin Atlantic is not expected to pay any penalty because it came forward to the OFT with information about price fixing. BA admitted in May that it had breached its own rules covering its compliance with competition law regarding fuel surcharges.
The penalty is the highest ever imposed by the OFT for infringements of competition law.
Philip Collins, OFT chairman, said: “This case, and the substantial penalty imposed, will send an important message to corporate boards and business leaders about our intention to enforce the law, and serves to remind companies of the substantial risks involved if they are found to engage in such behaviour.”
Willie Walsh, BA chief executive, said in a statement: ”I want to reassure our passengers that they were not overcharged. Fuel surcharges are a legitimate way of recovering costs.
”However this does not in any way excuse the anti competitive conduct by a very limited number of individuals within British Airways. Anti-competitive behaviour is entirely unacceptable and we condemn it unreservedly.”
The OFT investigation was conducted in parallel with a similar case brought by the US Department of Justice. The investigations were separate but the two agencies have consulted each other closely.
The DoJ action would cover allegations of illegal price-fixing of long-haul fuel surcharges on air cargo and a separate probe into alleged price-fixing of fuel surcharges on passenger fares, one person familiar with the case said.
Combined, the two investigations could result in BA being fined around £350m. The airline said on Wednesday that figure was consistent with a provision that it has already set aside and added that it was in plea negotiations with the US regulator.
The DoJ fine is expected to be announced later on Wednesday.
The OFT’s criminal probe into the allegations will continue.
The regulator’s civil powers allow it to fine companies up to 10 per cent of their worldwide sales, which in BA’s case reached £8.5bn last year.
BA faces further investigations over the cargo case in Brussels, Australia, Canada, New Zealand and South Africa, as well as civil litigation in the US, Australia and Canada. The DoJ and OFT could also take action against individuals allegedly involved in the passenger and cargo cases.
The gravity of the price-fixing allegations for both BA and some of its staff became apparent last October, when Martin George, previously seen as a candidate to become chief executive, resigned as commercial director over the fall-out from the passenger surcharges case. Kingsley Napley, Mr George’s law firm, declined to comment on Tuesday.
European and US antitrust officials first raided the offices of British Airways, Lufthansa, Air France-KLM, Cargolux and other air cargo companies as part of a global cartel probe in February last year.
In September, Germany’s Lufthansa said it had agreed to pay $85m (£41.8m) to settle class-action lawsuits pending in the US.
FT.com
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The airline industry is a small world where the transfer of vital safety information between airlines is the norm.Will anyone ever dare to talk to virgin about anything ever again,safety,spares,technical information ?
In the aviation world they have put themselves truly out in the cold.
they really are the playground snitch !!
In the aviation world they have put themselves truly out in the cold.
they really are the playground snitch !!
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Let us understand that "colluding" on something involves both sides doing something.
British Airways and Korean Air Lines Co each have agreed to plead guilty and pay separate $US300 million ($A353.29 million) criminal fines for conspiring to fix the prices of passenger and cargo flights, the US Department of Justice said today.
British Airways (BA) separately was fined a record £121.5 million in Britain after admitting collusion over fuel surcharges on tickets, according to the British antitrust agency.
The US charges against the British- and South Korean based airline companies were filed today in the US District Court for the District of Columbia.
.......Under the plea agreements, which are subject to the federal court approval, British Airways (BA) and Korean Air have agreed to cooperate with the ongoing investigation.........
The Justice Department charged Korean Air with agreeing with air cargo competitors on rates charged to customers in the United States and elsewhere for international air cargo shipments.
It noted that the conspirators agreed to increase the fuel surcharge over time from $US0.10 per kilogram to as high as $US0.60 for each kilogram of cargo shipped from the United States.
In addition, the department charged that Korean Air reached an agreement with its rival to fix certain passenger fares for flights from the United States to South Korea.
Two other airlines - Virgin Atlantic of Britain and Lufthansa of Germany - have agreed to cooperate in the antitrust division's ongoing investigations, the department said.
Both airlines have been conditionally accepted into the division's leniency program, it said, which allows a qualifying company that is the first to voluntarily disclose its participation in an antitrust crime and which fully cooperates in the subsequent investigation to avoid criminal conviction and a heavy fine.
The British BA fine was the largest penalty imposed by the Office of Fair Trading for violation of competition law.
The OFT said Virgin Atlantic escaped punishment because it cooperated with the inquiry. Virgin Atlantic blew the whistle on BA in 2006 by informing the OFT of their collusion.
The watchdog's subsequent probe led to the resignations of BA's commercial director and communications chief in October 2006.
Last edited by ScottyDoo; 1st Aug 2007 at 22:13.
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Like many other people have commented, it does seem rather unfair that Virgin are let off the hook while BA carry the can.
Does anyone know if the US government has any power to hit Virgin with a fine though?
The Americans do seem to be revelling in all this. I just watched the ITV News report at 10.30 and they had some idiot on from the US Dept of Justice, who not only insisted on calling BA 'British Air' but also claimed that 'every' American citizen and business has been affected by this!!
Does anyone get that? I certainly don't...
Does anyone know if the US government has any power to hit Virgin with a fine though?
The Americans do seem to be revelling in all this. I just watched the ITV News report at 10.30 and they had some idiot on from the US Dept of Justice, who not only insisted on calling BA 'British Air' but also claimed that 'every' American citizen and business has been affected by this!!
Does anyone get that? I certainly don't...
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I now expect an internal e-mail from the BA top brass asking for savings of £121 million in the next year as the next part of their business plan!!!.
Don't open wine or will it be washbags on demand for Club and First!!
All for the actions of a few at the top.I have no doubt they will get away with a wrist slap,then given some big pay off for their cock up and find a six figured salary job with another 'here for 18 months and move on' company!!.Yet again we the workforce we be here for years and again left to pick up the pieces.
WTDWL.
Don't open wine or will it be washbags on demand for Club and First!!
All for the actions of a few at the top.I have no doubt they will get away with a wrist slap,then given some big pay off for their cock up and find a six figured salary job with another 'here for 18 months and move on' company!!.Yet again we the workforce we be here for years and again left to pick up the pieces.
WTDWL.
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[QUOTE]I'd just like to see the money go to good use, perhaps in aviation safety research or airport safety improvements. Can't see that happening though.[QUOTE]
The chap from the OFT said that BA's fine will go to the treasury central fund. More money for Gordon to give to some "deserving" causes.
The chap from the OFT said that BA's fine will go to the treasury central fund. More money for Gordon to give to some "deserving" causes.
Last edited by Freddie-M; 2nd Aug 2007 at 07:13.
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I find the Americans sanctimonious preachings in all of this a bit rich. The major trans atlantic airlines have always matched each other on fuel surcharges, what BA did wrong this time was 'someone' picked up the phone and tried to set it before hand instead of waiting for the other player to change and then match it.
All very unfair, un British etc....
And who were the other operators, so badly affected by this underhand UK carrier dealings? Well mostly the 'bankrupt' American carriers, operating under bankrupcy protection from the US Government , providing a level and equal competition playing field for the UK carriers who had to survive in the normal world.
It all seems a bit one sided, and that includes the 'open skies' rubbish which also seems to greatly benefit the Yanks whilst giving us ......... nothing.
Fantastic to see the 'Special relationship' working so well.
p.s. Say hi to the 'Natwest 3' (If they're still alive?)
W2P
All very unfair, un British etc....
And who were the other operators, so badly affected by this underhand UK carrier dealings? Well mostly the 'bankrupt' American carriers, operating under bankrupcy protection from the US Government , providing a level and equal competition playing field for the UK carriers who had to survive in the normal world.
It all seems a bit one sided, and that includes the 'open skies' rubbish which also seems to greatly benefit the Yanks whilst giving us ......... nothing.
Fantastic to see the 'Special relationship' working so well.
p.s. Say hi to the 'Natwest 3' (If they're still alive?)
W2P
Last edited by wobble2plank; 2nd Aug 2007 at 10:03.
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I heard on the wireless last night that some American ambulance chaser is stoking up a "class action" case for some passengers from whom BA allegedly stole money.
If the fine was divvied out to the PAX who flew over that period, I might be due a few copper coins. Funny thing is that on the 2 occasions I flew with BA at that time, it was because their total fare was the lowest for sensible up and down times. I would like to be "overcharged" that way more often!
As an aside, does life on Ynys Mon really make people that grumpy?
If the fine was divvied out to the PAX who flew over that period, I might be due a few copper coins. Funny thing is that on the 2 occasions I flew with BA at that time, it was because their total fare was the lowest for sensible up and down times. I would like to be "overcharged" that way more often!
As an aside, does life on Ynys Mon really make people that grumpy?
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The problem the ambulance chaser will have (not including not being able to chase jumbos) is that setting a fuel surcharge in itself is not illegal.
The reason for the ridiculous fines is the manner in which Virgin and BA and KAL went about the surcharge rises. Collusion before the event is illegal and leads to the 'price fixing' problems. Raising the price of the surcharge is not. Just badly done.
BA, bless 'em, have screwed up again and got their fingers burnt. They've paid a hefty price for it. Lets hope that stupid american lawyers don't see this as a money generating bandwagon to jump on. Let them concentrate on the appalling state of their own aviation industry and represent the thousands of workers who have had their pay and pensions trashed by chapter 11.
The reason for the ridiculous fines is the manner in which Virgin and BA and KAL went about the surcharge rises. Collusion before the event is illegal and leads to the 'price fixing' problems. Raising the price of the surcharge is not. Just badly done.
BA, bless 'em, have screwed up again and got their fingers burnt. They've paid a hefty price for it. Lets hope that stupid american lawyers don't see this as a money generating bandwagon to jump on. Let them concentrate on the appalling state of their own aviation industry and represent the thousands of workers who have had their pay and pensions trashed by chapter 11.
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With the current trend towards chasing white collar criminals the gentlemen responsible at BA who have now left, face the distinct possibility of arrest and trial in the US. Just like the Natwest bankers. American law thinks they rule the bloody world.
Virgin just look like the snivelling teachers pet who tells on his mates. ( yes I know it's a serious matter but that is honestly how the perception is coming across ).
I know BA are far from perfect but credit to Mr Walsh for standing up and taking the hit. Is Capt Beardie still in hiding?
Virgin just look like the snivelling teachers pet who tells on his mates. ( yes I know it's a serious matter but that is honestly how the perception is coming across ).
I know BA are far from perfect but credit to Mr Walsh for standing up and taking the hit. Is Capt Beardie still in hiding?
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If only the OFT had had teeth in the days when BA were colluding with the Americans over Laker; doing naughties with the passengers of Virgin, Air Europe and any others they tried to break the company's management might have learnt some lessons to prevent this latest act of folly/arrogance/mis-management (delete as appropriate).
BA was a broken airline saved by the Thatcher Government so please, don't all all you BA people get high and mighty about what is happening over the pond with Chapter 9.
If you break the rules - you pay.
World's favourite airline - yeah, right!
BA was a broken airline saved by the Thatcher Government so please, don't all all you BA people get high and mighty about what is happening over the pond with Chapter 9.
If you break the rules - you pay.
World's favourite airline - yeah, right!
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900 - My gripe is with the Senior BA Management who allowed this to happen or are directly involved in it happening. That is why I am taking pleasure in this. I agree that it is not good for the company I work for and indeed we will probably begin to notice a drop in loads. HOWEVER, I work for a company which over the recent years has been down all our backs over cost savings and altered bonus targets making any chance of a bonus unreachable over something which is totally out of our control while at the same time our senior management award themselves with significant bonuses!
Why should I feel sorry for them? I think I am allowed laugh at them this time round! They are an arrogant lot, BA have been voted today the worst performing airline in europe and it is a result of their attitudes towards cost cutting and being Fit for 5 long before we actually go into it and if you ask me, this is the kick in the groin they deserve!
Why should I feel sorry for them? I think I am allowed laugh at them this time round! They are an arrogant lot, BA have been voted today the worst performing airline in europe and it is a result of their attitudes towards cost cutting and being Fit for 5 long before we actually go into it and if you ask me, this is the kick in the groin they deserve!
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Once upon a time BA and Virgin decided to have a boat race on the Thames. Both teams practiced long and hard to reach peak performance. On the big day they were as ready as could be and Virgin won by a length. BA were discouraged and senior management set up a project to investigate the problem. Its conclusion was that the Virgin team had 8 people rowing and one person steering. The BA team had one person rowing and eight people steering.
Senior management immediately hired consultants to study team performance. Millions of pounds were spent and several months later they concluded that there were too many people steering and not enough rowing. The following year the team structure was changed to 4 steering managers, 3 senior steering managers and one executive steering manager. A performance/appraisal system was set up to give the rower more incentive to work harder and become a key performer. They concluded he must be given empowerment and enrichment. The next year the big day arrived and Virgin duly won.
BA laid off the rower for poor performance, sold off the paddles, cancelled capital investment and halted development of the new boat. Then they gave high performance awards to the consultants and distributed the money saved among senior management.
Senior management immediately hired consultants to study team performance. Millions of pounds were spent and several months later they concluded that there were too many people steering and not enough rowing. The following year the team structure was changed to 4 steering managers, 3 senior steering managers and one executive steering manager. A performance/appraisal system was set up to give the rower more incentive to work harder and become a key performer. They concluded he must be given empowerment and enrichment. The next year the big day arrived and Virgin duly won.
BA laid off the rower for poor performance, sold off the paddles, cancelled capital investment and halted development of the new boat. Then they gave high performance awards to the consultants and distributed the money saved among senior management.