Bungling OFT left red-faced as BA price-fixing trial collapses

BA faces weeks of strikes as union talks fail again - though at least it's off the hook on price-fixing.

Last Updated: 31 Aug 2010

A mixed morning for British Airways: on the plus side, the trial of four past and present BA execs on price fixing charges has collapsed, following what the judge described as ‘manifest failures on the part of the prosecution’. That’s a major kick in the teeth for the Office of Fair Trading, which has spent three years and an awful lot of taxpayers’ money bringing the case to court. But sadly for BA, Unite is proving a rather more dogged opponent: the union is now apparently plotting up to three weeks of strike action in the summer, after members rejected the airline’s latest pay offer. Always good to kick your employer while they’re down…

Let’s take this price-fixing trial first, which has turned into a complete disaster for the OFT. BA and Virgin had already pleaded guilty to fixing fuel surcharges between 2004 and 2006; BA was fined £121.5m by the OFT (although Virgin got off scot-free because it blew the whistle - a bit unfairly, you might argue, since it was clearly just as guilty as BA was). So far, so good.

However, the OFT also decided to bring criminal charges against four BA execs – and it seems to have made a total mess of it. It emerged last week that the prosecution had an email showing that Virgin had decided to put up its fuel surcharge without consulting BA – thus disproving its collusion argument – and worse still, that this vital evidence had been withheld from the defence. The red-faced prosecution team said this morning that after reviewing its position, they’d decided not to offer any evidence against the four men. So the case promptly collapsed, at great cost to both the public purse and the OFT’s reputation.

On the other hand, British Airways arguably has more important things to worry about: viz., the ongoing efforts by Unite to cripple it from within. The union's members have just overwhelmingly rejected BA’s latest proposal, and some hard-line union officials are now calling for at least ten days and possibly as much as three weeks’ worth of strike action, which could start as early as next week. BA boss Willie Walsh has apparently given some ground on redundancies, but he’s playing hardball over benefits and disciplinary action – and the union is determined to fight with fire. Even if, apparently, they might end up crippling the airline and putting them all out of a job.

The previous strike and the ash cloud disruption have already taken a big chunk out of BA’s revenues this year (airport operator BAA said today that passenger numbers were down by more than a fifth in April). So this really could not come at a worse time. And there’s absolutely no sign that common sense will prevail any time soon.

In today's bulletin:

Greek bailout sends FTSE soaring - despite political wrangles
Bungling OFT left red-faced as BA price-fixing trial collapses
Harrods to go global as Al-Fayed cashes in his chips
Stress: PwC not buying that for Tenner
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