Customers win compensation from BA and Virgin after price-fixing lawsuit... but may get as little as £2 per flight

Passengers are expected to receive between £2 and £10 per flight for the amount they were overcharged by the two airlines which colluded on the level of fuel surcharges added to ticket prices.

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Those on a long-haul return ticket could receive £20, with a family of four receiving back £80. Frequent fliers could receive hundreds of pounds.

The settlement will cost BA about £73million and Virgin about £34million - and lawyers are said to be earning around £25million.

BA said that about 11million passengers, including seven million in the UK, were affected by the settlement.

About 800,000 Virgin Atlantic passengers were involved, of whom about 480,000 are from the UK and 320,000 from the U.S.

BA and Virgin admitted colluding over fuel surcharges on long-haul flights between August 2004 and March 2006.

The charges, in response to rising oil prices, increased from £5 to £60 per ticket for a typical BA or Virgin longhaul return flight over that period.

All long-haul passengers during the key time can claim compensation, not just those on transatlantic routes. But it could be summer before the mechanism is in place to get the cash.

The deal follows a U.S. class-action lawsuit bought on behalf of UK and American travellers who were victims of the anti-competition cartel.

The airlines were castigated by the authorities on both sides of the Atlantic for colluding with one another in a rip-off price-fixing scam that centred on fuel surcharges rising in tandem over 18 months.

British Airways was fined nearly £300million for its part in the rip-off. But because Sir Richard Branson's Virgin Atlantic "grassed" to the watchdogs about the price-fixing in which it was itself engaged, it was given immunity from fines and criminal prosecutions in the UK and in the United States.

The system is designed to undermine cartels by sowing distrust between colluding companies. In this case, Virgin went to the authorities and British Airways was hit with the fines. But both were guilty of pricefixing.

Two senior BA executives lost their jobs as a result of their role in the swindle.

The Office of Fair Trading and Department of Justice will rule in May or June whether to take criminal action against ten BA executives at the heart of the scandal. The Americans have suggested that if the OFT does not, they will.

BA chief executive Willie Walsh said: "We absolutely condemn any anticompetitive activity by anybody.

"This settlement, which BA and Virgin Atlantic have jointly agreed with the lawyers for the plaintiffs, is fair and reasonable. BA can now move on and do what we do best - delivering excellent customer service."

A spokesman for Virgin Atlantic said: "We deeply regret our involvement in this matter and believe that the provisional settlement reached draws a line under this episode."

The lawsuit was brought by U.S. law firm Cohen, Milstein, Hausfeld & Toll. The firm would not give details of its fees for the action.

But aviation sources suggested the lawyers will have earned around £25million from the case.

Michael Hausfeld, a senior partner at Cohen Milstein, said: "We are delighted to have achieved such a terrific settlement for UK consumers. BA and Virgin overcharged their customers over a period of almost two years.

"Customers in the UK should claim back what was unlawfully taken from them in order to demonstrate that such behaviour is unacceptable.

"This is the first time non-US citizens have been rewarded on an equal footing to U.S. citizens in a case before the U.S. courts, making this a legal precedent and a significant milestone in both U.S. and UK legal history."

• Passengers eligible for compensation are those who flew long haul with British Airways or Virgin Atlantic between 11 August 2004 and 23 March 2006.

Passengers who think they may be eligible for a partial refund from either Virgin or British Airways should not contact either airline.

Instead, full details of the claims process will be made available within 60 days when a claims administrator will be appointed.

Passengers will be invited to make contact with the administrator, and those who are eligible will then be offered a refund.

Virgin said it had calculated its compensation figure at between £2 and £10, a third of the total amount of the fuel surcharge at the time the ticket was booked, and BA is using the same figures.

Details of how UK passengers and businesses will be able to register to claim the refund were to be made available from 7pm last night by the lawyers on www.airpassengerrefund.co.uk or by telephoning 0800 043 0343.

Virgin Atlantic said: "No claims can be made until an independent claims administrator is appointed and the settlement receives final court approval. Virgin Atlantic will not be directly involved in the claims or refund process."