NPR logo DOJ Fines British Airways $300 Million


DOJ Fines British Airways $300 Million

British Airways Plc has to shell out $300 million to the USA for involvement in fixing prices of fuel surcharges.

The Justice Department levied the fine Wednesday after London-based British Airways admitted to colluding on how much extra to charge on passenger and cargo flights, to cover fuel costs.

Surcharges were added to passenger fares in response to rising oil prices.

U.S. officials took action after the U.K.'s Office of Fair Trading fined the carrier for illegal talks with rival Virgin Atlantic Airways.

The fine was the second-largest it has doled, the Justice Department said.

Scott Hammond of Justice's antitrust division said American businesses and consumers ended up paying more as a result of these crimes.

"American companies rely on competitive shipping rates to export their goods to foreign markets, American consumers rely on imports for so many consumer and household goods, American families flew these airlines on international destinations," he said.

It is the first time that the U.K. and the U.S. have simultaneously brought action against a company.

Virgin Atlantic was given immunity after blowing the whistle on British Airways, disclosing discussions between people from both carriers proposing changes to fuel surcharges for long flights.

British Airways had colluded with Virgin Atlantic on at least six occasions between August 2004 and January 2006.

London regulators were not expected to fine Virgin Atlantic.

Investigations into British Airway's price-fixing began in June 2006 by both the Justice Department and London's regulators.

British Airways revealed in May that it had set aside funds to cover fines and the cost of legal action.

The fines end the civil case against British Airways, but a criminal investigation is still continuing.

British Airway's CEO Willie Walsh insisted that passengers had not been overcharged because fuel surcharges were "a legitimate way of recovering costs."

However, he acknowledged that the conduct of some of the carrier's employees had been wrong and could not be excused. "Anti-competitive behavior is entirely unacceptable and we condemn it unreservedly," he said.

From NPR and The Associated Press.