BA hit with £58m fine but escapes full rigour after admitting offence

A RECORD fine imposed on British Airways (BA) for colluding with rival Virgin Atlantic on fuel surcharges has been halved to £58.5 million.

The Office of Fair Trading (OFT) said yesterday the revised penalty reflected the level of BA’s co-operation in the investigation into pricing on long-haul flights between August 2004 and January 2006.

In August 2007, the regulator fined it £121.5m after Virgin effectively blew the whistle on what had been going on between the two airlines. Under the OFT’s leniency policy, Virgin was not fined.

While BA agreed to pay the fine under an early resolution agreement, the final penalty was not confirmed by the OFT until yesterday.

The verdict comes a year after the collapse of criminal proceedings brought by the OFT against a number of former BA executives.

Ali Nikpay, OFT senior director of cartels and criminal enforcement, said the penalty sent out a message that co-ordinating pricing through the exchange of confidential information between competitors was unlawful.

He added: “The size of the fine underlines that it is important for companies to take steps to ensure that they have an effective compliance culture.

“The fine would have been higher still but for the co-operation provided by BA throughout the OFT’s investigation. Without this, together with BA’s admission of the infringement, the case would have taken considerably longer to resolve.”

A spokesman for BA: “We are pleased that this matter has been settled.”