Monday, April 26, 2010

BA price-fixing cartel heads to court

BA price-fixing cartel heads to court

The trial of three ex-British Airways executives and one current employee on has began in London on accusations of fixing the price of fuel surcharges.

The four defendants agreed with each other along with others at Virgin Atlantic “to make and implement agreements which would lead, and which in fact did lead, to price fixing”, Southwark Crown Court heard today.

The charges relate to price-fixing over a period of 18 months, between 1 July 2004, and 20 April 2006, when fuel surcharges rose from £5 to £60 for a typical long-haul return ticket.

The accused include BA’s current sales and marketing director Andrew Crawley, former head of communications Iain Burns, its former head of sales in the UK and Ireland Alan Burnett, as well as former commercial director Martin George. All four deny a cartel offence under the Enterprise Act 2002.

Richard Latham QC, prosecuting for the Office of Fair Trading, told the jury that the “crucial element” was that of dishonesty in a secret price-fixing arrangement.

“No one complains because no one knew what was going on,” he said. “But every single purchaser is a victim.”

He said the four defendants dishonestly agreed with Virgin Atlantic executives Paul Moore, William Boulter and Steven Ridgway to fix the price of fuel surcharges.

However he said by blowing the whistle on the criminal cartel, the three Virgin executives would be granted immunity from prosecution.

“The situation may arise where the defendants are little more culpable than the prosecution witnesses,” he said.

“But if Virgin executives had not admitted their participation in price-fixing with British Airways the illicit activities would almost certainly have remained hidden to this very day.”

The case continues.

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