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BA Fine Over Price Fixing

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BA Fine Over Price Fixing

Old 1st Aug 2007, 06:40
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BA Fine Over Price Fixing

As reported on BBC News - http://news.bbc.co.uk/1/hi/business/6925397.stm - BA have been fined 121.5m over the price fixing of fuel surcharges by UK Authorities (Office of Fair Trading), with US Dept of Justice to report later on Wednesday. Virgin to receive no fine.

Jordan

(Apologies if this has already been posted elsewhere)
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Old 1st Aug 2007, 06:52
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Well done BA for finding another use for 121.5, perhaps there will be a distress call coming from their management soon! Quite a hefty fine, a bit OTT I think
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Old 1st Aug 2007, 07:26
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one question

who actually gets this money?
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Old 1st Aug 2007, 07:26
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Iva harden,

'a bit OTT'??

The worlds favourite airline ripped it's own pax off with a surcharge fixing scam and admitted guilt.

They faced a potential 10% fine on global revenues..8.1 billion, so it could have been 810 mil. Not OTT really is it?

Shags
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Old 1st Aug 2007, 07:29
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rallymania,


Good Question I was about to post the same.


I did read that BA set aside this money and found it cheaper to pay the fine than play the rules!
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Old 1st Aug 2007, 07:31
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Dont forget this is only the UK side of it
The US will still fine them
But really, if youre price fixing, you have to have someone to fix with !
Surely one party cant be totally responsible
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Old 1st Aug 2007, 07:39
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BA were caught with their pants down trying to rip off SLF.
IMHO SLF should benefit from this fine, not sure how it could be carried out without the money benefiting BAA. Reduce Fares??
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Old 1st Aug 2007, 07:41
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shags,

we have not seen the full extent of the american side yet. I would say 121.5 m is a sizeable wedge, you must have deep pockets. Did they really rip off punters? I think that a bit strong but they fixed it with Virgin, the two brit airlines flying the Atlantic. I would say they perhaps joined forces to compete with the US airlines who are able to get protection and continue to operate even when declared bankrupt. Looking after the brit interest........the only crime really was that they got caught!! Silly peeps!!

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Old 1st Aug 2007, 07:46
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Let's not forget Virgin Atlantic's role in this rip off of their passengers, especially as they have tried to sell themselves as ethically superior to BA when all along they are no different.

Last edited by warkman; 1st Aug 2007 at 08:13.
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Old 1st Aug 2007, 07:49
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exactlyt right Iva Harden. They can hardly say the ripped off passengers as it was marked on the tickets, fuel surcharge. They have always been open about charging a fuel surcharge unlike the likes of Ryanair who insist they never have and never will make a fuel surcharge, they just hide it in their fares
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Old 1st Aug 2007, 07:49
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anotonovman
But really, if youre price fixing, you have to have someone to fix with! Surely one party cant be totally responsible
They colluded with VS who realised the error of their ways and reported the scam. According to the BBC report, the OFT says that VS is not expected to be fined.

It appears that BA wanted to keep the headline price of their tickets down to compete with other carriers but then used fuel surcharge to keep prices up. It is an old (and legal) process that worked for them in previous decades and might have worked again, had they not have broken the law and tried to ensure that their prices remained high.

I would suggest that one reason is that BA, in common with so many other companies, has deliberately lost too many of it's older managers. That is, the one's with the memory to recall previous problems/failures/misdoings in the company and warn the younger managers off such behaviour. It's a simple example of why each generation has to learn the same lessons that their father's learnt. And it usually is fathers not mothers...
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Old 1st Aug 2007, 08:11
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"that VS is not expected to be fined."

It's a done deal and the ink is dry...they have been given immunity.
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Old 1st Aug 2007, 08:47
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Am I being overly cynical in suggesting that it could have been a sting by Virgin?
Agree with BA to surcharge the pax, then snitch to the govt. Result - drop BA in the brown stuff and get them fined, Virgin come up smelling of roses.
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Old 1st Aug 2007, 08:52
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Quite unjust, I think, that VS is let off so lightly, as they are just as guilty as BA. And MAY in fact, have been the ones who instigated the collusion in the first place. Facts we will never know.

Perhaps they should have both been fined LHR slots instead, which could have been re-allocated to new competition...
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Old 1st Aug 2007, 08:54
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from BBC News:
BA colluded with Virgin Atlantic over the surcharges, which were added in response to rising oil prices, the Office of Fair Trading (OFT) said.
Virgin Atlantic has been given immunity after it reported BA's activity and is not expected to be fined, the OFT said.
So, Virgin also benefitted, then 'snitched' on BA, and now VS is immune from prosecution? Where the hell is the justice in that then??!
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Old 1st Aug 2007, 09:04
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Yeh.
Virgin waited for three years to sting BA.
More like someone was getting close to the truth and Virgin blinked just before BA did.
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Old 1st Aug 2007, 09:15
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Clearly Virgin have better managers than BA! One wonders what the SLF think about it, and what the effect will be on pax loyalty (if there is such a thing?).
The sooner proper open skies come forward the better, then EVERYONE can price fix......
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Old 1st Aug 2007, 09:38
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Bearing in mind that BA settled out of court with Virgin over their poaching etc of Virgin pax some years ago, this is pay back time. This time, in full!
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Old 1st Aug 2007, 10:25
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Aside from the first post in this thread, what on earth are the rest of the replies doing here. If this is supposed to be the professional pilots website, why are so many rank amateur, think-they-know-it-all, anoraks spouting off aout things they obviously have no inkling about?

Mods, just read some of the pathetic replies above!
Yeh.
Virgin waited for three years to sting BA.
More like someone was getting close to the truth and Virgin blinked just before BA did.
So, Virgin also benefitted, then 'snitched' on BA, and now VS is immune from prosecution? Where the hell is the justice in that then??!
Perhaps they should have both been fined LHR slots instead, which could have been re-allocated to new competition.
Agree with BA to surcharge the pax, then snitch to the govt. Result - drop BA in the brown stuff and get them fined, Virgin come up smelling of roses.
Let's not forget Virgin Atlantic's role in this rip off of their passengers, especially as they have tried to sell themselves as ethically superior to BA when all along they are no different.
I did read that BA set aside this money and found it cheaper to pay the fine than play the rules!
who actually gets this money?
Quite a hefty fine, a bit OTT I think
Isn't there a forum for all the anoraks who think that they know how to run the airline business. With quotes such as the ones above, either this isn't the professional pilots forum or it's the spotters balcony where every enthusiast can post their ignorant thoughts about "my favourite airline is better than your favourite airline. Na na, na na!"

C'mon mods, lets keep the kiddies in their playpen and move threads such as this one to the corner you use for the drooling anoraks.
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Old 1st Aug 2007, 10:59
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They can hardly say the ripped off passengers as it was marked on the tickets, fuel surcharge. They have always been open about charging a fuel surcharge
However, they have hardly been 'open' about how that fuel surcharge has been fixed over a period of 17 months.

unlike the likes of Ryanair who insist they never have and never will make a fuel surcharge, they just hide it in their fares
As much as it pains me to say it Ryanair are on the right side of the legal line in the way they pass on any surcharges to the customer. BA and Virgin have quite evidently crossed that line which is gross stupidity.
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