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Four BA bosses charged over price-fixing scandal
Martin Bentham, Home Affairs Editor07.08.08
Four former and current British Airways executives were today charged with criminal price fixing.
In only the second - and easily the highest profile - case of its kind ever seen in Britain, the men were charged by the Office of Fair Trading with "having dishonestly agreed with others" to fix fuel surcharges for long-haul passengers.
The four - head of sales Andrew Crawley, former commercial director Martin George, former head of communications Iain Burns and former head of sales for the UK and Ireland Alan Burnett - could each face up to five years in prison and unlimited fines.
They are due to appear before City of London magistrates' court on 24 September.
The OFT charges concern conversations alleged to have taken place between the BA executives and their counterparts at arch rival Virgin Atlantic between July 2004 and April 2006.
It is the latest dramatic legal move by a far more aggressive OFT determined to use its powers to stamp out cartels in British business.
In June three former oil industry executives were given jail sentences of between 30 and 36 months for running a cartel that illegally set the price of marine hoses.
However the BA charges are the first to be brought over business dealings carried out after price fixing was criminalised by the 2002 Enterprise Act.
The fact that the charges are being brought in Britain means the quartet are far less likely to be extradited to America, where the potential sentences could be far more severe.
The alleged price fixing is said to have caused 11million BA passengers to pay more for their flights than they needed to at a total out-of-pocket cost of around £100million.
Mr Burnett retired from BA in 2006 and Mr George and Mr Burns resigned in the same year.
In his resignation letter, Mr George said that he was aware of "inappropriate conversations" that had taken place in his department "in violation of company policy" although he denied direct involvement.
British Airways has already been fined more than £270 million for its role in the alleged cartel by the OFT and the US Department of Justice. Virgin Atlantic avoided a fine because it blew the whistle to the regulators.
Prosecutors claim that the surcharges - imposed to cover the rising cost of aviation fuel - went up in step for a year and a half following illegal collusion between the competing carriers, which are Britain's two biggest long- haul airlines.
The airlines have since established a £100 million compensation fund for passengers who believe that they were ripped off.
Customers in Britain are entitled to a payout of up to £20 per return ticket depending on the size of the fuel levy when the ticket was booked.
