Britain’s Office of Fair Trading (OFT) said on Thursday it was investigating ”alleged price coordination” related to the imposition of fuel surcharges within the airline sector and that it had visited British Airways as part of the probe.
BA had earlier announced that the OFT and the United States Department of Justice (DOJ) were investigating alleged cartel activity involving it and other airlines.
”The OFT has visited British Airways plc’s business premises on 13 June 2006 as part of an investigation into alleged price coordination by airlines in relation to fuel surcharges for long haul passenger flights to and from the UK,” the OFT said in a
statement.
The probe was at an early stage, and no assumption should be made that there was an infringement of anti-trust regulations, the statement added.
”The OFT will not be in a position to conclude whether the law has in fact been infringed until it has completed its investigations and assessed the available evidence.”
BA said that the British-US investigation was in relation to pricing of passenger air transportation, including fuel surcharges.
Neither the OFT nor BA indicated which other companies might have joined a suspected cartel.
Meanwhile, a spokesperson for Virgin Atlantic said: ”We are aware of the investigation into BA and we are helping the authorities with information”.
High oil prices have forced most major carriers to levy a so-called fuel surcharge to cover the soaring cost of jet fuel, but low-cost airlines like Ireland’s Ryanair and Britain’s easyJet have rejected such a move.
In Frankfurt, the German flag carrier Lufthansa said it had no knowledge of such an investigation.
”We do not know of any such matter,” a Lufthansa spokesperson said.
In reaction to Thursday’s news, BA’s share price plunged by 4,96% to 349,5 pence in morning trade, while London’s FTSE 100 index of top shares, on which BA is listed, rose 1,04% to 5 724,00 points.
Over in Germany, Lufhansa saw its shares sink 0,78% to €14,04 while the Frankfurt’s DAX 30 index on which it trades gained 0,92% to 5 554,21 points.
BA said that the company’s policy was to conduct its business in full compliance with all anti-trust regulations, adding that it was assisting the DOJ and the OFT with their investigations.
The British airline said that Martin George, BA commercial director, and Iain Burns, head of communications, have been given leaves of absence while the probe is conducted.
A BA spokesperson quoted by the financial news agency AFX News said the investigation announced on Thursday was not connected to a probe being conducted by the European Commission and the DOJ into alleged cartel activity in air cargo services.
BA had announced in February that the group had received a request for information from the European Commission and the DOJ as part of a different probe into a suspected cartel of airlines and air freight companies.
Last month, BA posted a bumper increase in net profit for its 2005/2006 fiscal year, overcoming surging oil prices and strike action.
BA’s overall net profits leapt 19,1% to £467-million (€689,5-million, $883-million) in the 12 months to March 31 compared with the previous fiscal year. – Sapa-AFP