BA has its wings clipped

The OFT has come down heavily on BA and fined it a record £121.5m for colluding to fix prices on fuel surcharges. Virgin, meanwhile, seems to have gotten off scot-free, despite what was, by all accounts, an equal role in the misdemeanour. The whole saga is reminiscent of the schoolyard: BA and Virgin get up to a bit of mischief together, then Virgin gets the willies and decides to dob its cohort in. BA then finds itself bent over the desk in the headmaster's office awaiting an almighty caning, while out the corner of its eye it can see Virgin running around outside, free to enjoy a game of British Bulldog.

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Last Updated: 31 Aug 2010
That the OFT was right to impose a stiff penalty is hard to dispute. After all, both airlines had staged secret meetings spanning a 17-month period, in which they agreed not to undercut each other when it came to ticket price hikes, introduced as a response to rising oil prices. Such a sustained and deliberate ploy fits the definition of ‘anti-competitive behaviour' like air steward's cravatte, and BA is expecting more of a hit later today when the US Department of Justice concludes its investigation. Indeed, BA has set aside £350m to cover all fines.

Quite where it gets these limitless amounts of cash, we're not sure, especially when profits are falling as passenger numbers drop and fuel prices rise. Perhaps BA could go to cash-rich Ryanair for a loan.

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