BA facing price-fixing investigation |
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Published
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Thu, 22 Jun 2006 11:45
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LONDON - British Airways is facing an investigation from UK and US regulators over suspicions of price-fixing on its routes as well as the way it handled fuel surcharges.
The UK's Office of Fair Trading (OFT) and the United States Department of Justice have launched an inquiry into alleged "pricing of passenger air transportation, including fuel surcharges," BA confirmed, adding that it was fully co-operating with the investigations. Adding intrigue to the situation was the fact that BA commercial director Martin George and communications chief Iain Burns have gone on "leave of absence during the investigation".
An OFT spokeswoman admitted that an investigation was going on, but did not elaborate. BA issued a statement saying, "British Airways' policy is to conduct its business in full compliance with all applicable competition laws. British Airways is assisting the OFT and DOJ with their investigations." At the end of April the airline increased its fuel surcharge on long-haul destinations to £70.This move was the sixth such move since the practice began two years ago.
Last month the company reported a better-than-expected profit of £620 million. This improved performance, which was 21 percent more than the previous year brought a £48 million bonus to its employees. At that time BA had revealed that its fuel costs had jumped 44.7 percent to £1.6 billion and that it would have to spend £600 million extra to keep its planes in air.
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BA cuts down European fares by 50% 