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)

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:\

one question

who actually gets this money?

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

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!

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

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??:confused:

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!!

:=

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.

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

anotonovmanThey 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...

"that VS is not expected to be fined."

It's a done deal and the ink is dry...they have been given immunity.

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.

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...

So, Virgin also benefitted, then 'snitched' on BA, and now VS is immune from prosecution? Where the hell is the justice in that then??!

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.

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......

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!

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! 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. :rolleyes:

However, they have hardly been 'open' about how that fuel surcharge has been fixed over a period of 17 months.

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.

1) There a lot of misunderstandings about the alleged "Dirty Tricks". BA never admitted gult to any of them, including poaching of passengers and the out of court settlement was over a libel action, not Dirty Tricks per se.

2) There are also a lot of misunderstandings about pricing. Fuel charges are not a rip off or a scam. They are simple pricing decisions which any airline can take at any time. They are shown on the ticket along with something which often is a rip off,- government taxes. Even without " inappropriate conversations" many airlines would change roughly the same anyway for competitive reasons.

So.... no reasons for righteous hysteria about rip offs etc. That would be an entirely separate issue from the legality of conversations. Like it or not, BA is a highly successful business and the fact that it might have been more sucessful if it had not culled most of its older managers and thereby also lost its corporate memory and wisdom is also a different issue.

So Virgin have been given immunity from action by the UK OFT. Does the same apply to the US Dept of Justice investigation?

mumbo jumbo,
Well, here's a professional pilot comment:
"Lie down with dogs, get up with fleas!"

BA fined
 

Just watching Sky news, Willie Walsh biting the bullet and admitting price fixing on fuel surcharges, very sorry etc, coming across very well, and holding his airline accountable. £121,000,000 fine.

Virgins Man Paul someone or other squirming and slithering to try to avoid any admittance of doing anything wrong. Dear oh dear, where did they get this bloke from ? he is making Virgin look very underhand, cheap and frankly silly.

I love the fact that because Virgin 'blew the whistle' they get let off and pay no fine!!!!!!!!!!!!! That's effing fair.......:mad:

I think that they have that rule in order to encourage people to blow the whistle.

It may not be fair but if nobody told anybody about the arrangement then it would still be going on with nobody any the wiser.

Let us understand that "colluding" on something involves both sides doing something.

When found out one side gets off scot free, the other pays £121m.

1. Do you honestly believe that if BA had spoken to the government first about this colluding, Virgin would have been fined £121m and BA allowed to get off scot free ?

2. Sir Richard Branson was Chairman of Virgin throughout this period of the collusion (the BA top execs have changed since then). Will Sir Richard now resign ?

3. Who, other than the lawyers involved, thinks that this "if you say so first, get let off, if you say so second, fined a huge amount of money" approach does anything other than drag the law into complete disrepute ?

By all accounts it was'nt BA that instigated these conversations so whatever you think about either airline it would not be justice to only punish BA no matter who saw the OFT coming first

But the difference being, SRB actually owns 51% of Virgin, non of the BA management own any of it, aside from any shares they may have, they are just employees so I don't think SRB needs to step down as it is his company therefore he can pretty much do what he likes with it (within the law) - although I very much doubt that he had any actual involvement in this issue anyway.

The BA management on the other hand are supposed to be acting in the best interests of the shareholders, and in this case (speaking as a shareholder myself) they haven't.

:\

The US Department of Justice have just mentioned in their press conference that they may be further charges against individuals and other companies involved in the cartel.

mumbo jumbo.....looks like you are living up to your name and talking......well...mumbo jumbo. Sounds like you are a wannabe failed pilot who is bitter and twisted, living on your own on an island full of druids!....any sheep there !!:ok:

Eh??? :confused:

http://news.bbc.co.uk/2/hi/business/6925397.stm

Not a good day for BA.

From what I heard the people involved were just talking to Virgin about the surcharges and broke the law, but not really doing it in a malicious way or to rip the passengers off.

Of course the Americans are lapping it up, with the FBI 'knocking on BAs door'. I'm sure BA will be targeted more by the Americans purely because they are British. Not forgetting all this Ch.11 bull that US airlines get :rolleyes:

If the surcharges are a 1000% increase, why have they not been lifted? I find that figure hard to believe!

My money is on the surcharge rising again to pay for the fine!
As a BA worker I can see the company got what it deserved. "We" broke the rules and as such were punished. Shame the fine was at the expense of any employee reward scheme we were due - mistakes of a few cost a lot of us a lot of money.
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.

OMG!!! LOL I've just Noticed. IVA HARDEN I love your name! It made me laugh and the last 2 dys i have been feeling a bit down if you pardon the pun:p

Anyway One thing i've noticed was on another airline, lets say "city travel indirect" how expensive they were last winter. Plus having worked at the airport in MAN T1 for a long time seeing all the PAX crammed in like sardines. It makes me wander why it was so expensive. BA isnt that bad when it comes to prices IMO. Especially when i saw a ticket to LAX for £271 incl. taxes

Forgive me if I have missed the point here, I am but a simple engineer!

Maybe the wiser amongst us could try to explain just how this works

So we have BA fined for what is effectively price fixing with Virgin, and get hit by a big fine in the UK. That seems fair as they are UK based and broke UK law...

BUT why in the name of all that is holy have they also been shafted with a huge fine from the good old boys across the pond.... seems like BA suffer twice for one crime!

I in no way condone what BA (And virgin) did, and agree that action was due, but surely the UK courts are the place to deal with UK matters.

Would we have tried to impose a fine on say, American Airlines if they had been caught doing similar with United? and If we ever tried would they pay?

I do wonder why employees of BA enjoy its difficult moments - do you then moan about no bonus?
Professional? - purr..llees...!!
As I understand things, Virgin played with certain parties in BA then ran for cover. I would too, given the price.
I think that in these cases, there is an opportunity for the quickest grass to escape with some money (but not necessarily reputation) intact. SRB - not in the public eye on this one - fancy?
Question - (for non - BA pilots) -why do you all 'diss BA so badly when it's obvious that you want to work for us.
Question - (for BA pilots) - Hate it so badly? Then please help us improve it but don't celebrate our bad news.
Incidentally, I'm not a pilot (scared of heights really) but I do work for BA and will never celebrate its failures.
I have some skin in this business and I want a return!
Do you?

Can you post that again in English please? :mad:

As a front line employee of the company I am delighted that BA are getting a Royal kick up the arse for this (and long overdue as this whole ordeal is a perfect example of the arrogant attitude of modern BA management) I was rather appalled at the way the Americans were really criminalising BA during their press conference and making it sound like every single person working for BA was a cheating, robbing criminal!!! It also did not help that I was standing down at T1 departure gates in LHR waiting for my flight home in uniform watching the press conference live and having passengers look at me like they wanted to spit on me!!! LOL

The reason however I feel why BA seems to be singled out more so in the states (Korean also had a rather hefty thrashing by them) is because the Americans have always considered BA one of their biggest competitors over the Atlantic and especially since 9/11 has really left its own carriers suffering (although I think lack of any decent service onboard their carriers probably had a lot to contribute to this). This could be used not only as political sway for their own selfish agendas but as a way to try and boost yields and confidence in US carriers amongst the American public!!!! However I say it is only time before either Europe or someone else blows the whistle on the US carriers too!!!

The thing that makes me laugh is that I really do believe that these fuel charges would have been implemented anyways regardless of whether BA broke anti trust rules or not!!!