*** BREAKING NEWS - BA FINED £121.5m ***
Aug 1, 2007, 12:06 am
#1
Original Poster
Join Date: Jun 2001
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Posts: 1,663
*** BREAKING NEWS - BA FINED £121.5m + (Est: £200m by DoJ) ***
Issued by RNS [Via ReutersTerminal]
RNS Number:2659B
Office of Fair Trading
01 August 2007
113/07 1 August 2007
BRITISH AIRWAYS TO PAY RECORD £121.5m PENALTY IN
PRICE FIXING INVESTIGATION
British Airways has admitted collusion over the price of 'long-haul passenger
fuel surcharges' (surcharges) and will pay a penalty of £121.5m to be imposed by
the OFT, thus enabling the OFT to close its civil investigation and resolve this
case. The penalty will be the highest ever imposed by the OFT for infringements
of competition law, and demonstrates the determination of the OFT to deal
vigorously with anti-competitive behaviour.
British Airways has admitted that between August 2004 and January 2006, it
colluded with Virgin Atlantic over the surcharges which were added to ticket
prices in response to rising oil prices. Over that period, the surcharges rose
from £5 to £60 per ticket for a typical BA or Virgin Atlantic long-haul return
flight.
Virgin Atlantic is not expected to pay any penalty as it qualifies in principle
for full immunity under the OFT's leniency policy. Under this policy, a company
which has been involved in cartel conduct and which is the first to give full
details about it to the OFT will qualify for immunity from penalties in relation
to that conduct. In addition, any company staff involved in the price fixing
disclosed will qualify for immunity from criminal prosecution in relation to
that conduct. The OFT's investigation was prompted after Virgin Atlantic came
forward with information about price fixing with BA over the surcharges. British
Airways has also provided full co-operation with the OFT's investigation under
the leniency programme and this is reflected in the penalty announced today.
British Airways accepts the OFT's finding that on at least six occasions the two
companies discussed and/or informed each other about proposed changes to the
level of the surcharges, rather than setting levels independently as required
under clear and well-established competition law principles.
The OFT's investigation was conducted in parallel with a similar case brought by
the United States Department of Justice (DoJ). The investigations by the OFT and
DoJ were separate but the two agencies have consulted each other closely
throughout.
In addition to the investigation into British Airways' corporate conduct under
civil competition law, the OFT is also conducting a criminal investigation into
whether any individuals dishonestly fixed the levels of the surcharges - an
offence under the Enterprise Act. The corporate admission by British Airways
that it infringed civil competition law does not imply that any individuals
dishonestly fixed prices contrary to the Enterprise Act. The criminal
investigation is ongoing and no conclusions have been reached as to whether
criminal proceedings against individuals can or should be brought.
The OFT's infringement decision against BA will be taken and published in due
course. It will record the full findings in this case and the basis for the
calculation of the penalty to be imposed on British Airways.
Philip Collins, OFT Chairman said:
'This case, and the substantial penalty imposed, will send an important message
to corporate boards and business leaders about our intention to enforce the law,
and serves to remind companies of the substantial risks involved if they are
found to engage in such behaviour. It also illustrates how the OFT's leniency
programme enables companies to eliminate or reduce their exposure to penalties
by taking prompt and effective action. On a broader front, the OFT is committed
to strong and effective competition law enforcement, especially in relation to
price fixing and other hardcore infringements. Our commitment to enforcement
emphasises the importance of effective and comprehensive competition law
compliance led by boards and senior management and supported by effective risk
management systems and corporate governance.'
NOTES
1. Fuel surcharges, when set independently, do not infringe competition law.
Such surcharges were first introduced by each of BA and Virgin Airways in May
2004. The earliest evidence of collusion between the companies dates from August
2004.
2. The OFT confirmed its investigation into price coordination in relation to
long haul passenger flights to and from the UK on 22 June 2006.
3. The OFT's investigation was conducted under the Competition Act 1998 which
gives the OFT the power to impose penalties on companies of up to 10% of their
worldwide turnover for price fixing and other forms of anti-competitive
behaviour.
4. The Competition Act 1998 prohibits agreements, practices and conduct that may
have a damaging effect on competition in the UK. The Chapter I prohibition
covers anti-competitive agreements and concerted practices, that have the object
or effect of preventing, restricting or distorting competition in the UK (or a
part thereof). Its European counterpart, Article 81 of the EC Treaty, covers
equivalent agreements or practices which affect trade between EU Member States.
5. The Enterprise Act 2002 prohibits price-fixing and other cartel agreements
made dishonestly by individuals. The facts and matters requiring to be proved
are substantially different between the civil and criminal competition law
regimes. The corporate admission by BA does not imply that individuals have
committed criminal offences.
6. Under the OFT's leniency policy an undertaking may be granted immunity from
penalties or a significant reduction in penalty in return for reporting certain
categories of Competition Act infringement and assisting the OFT with its
investigation. Virgin Atlantic is expected to be granted immunity from penalties
as it informed the OFT of the infringement before the OFT had commenced its
investigation; BA has been granted a reduction in penalty.
7. In calculating financial penalties, the OFT takes into account a number of
factors including the seriousness of infringement, the relevant turnover and any
mitigating and/or aggravating factors. The basis of the OFT's considerations are
set out in 'OFT's guidance as to the appropriate amount of a penalty' - see OFT
website for more details.
8. The penalty will be payable following issue of an infringement decision to be
published in due course. The full details of the penalty calculation will be
included in the infringement decision. The level of penalty reflects not only
the granting of leniency to BA but also the additional co-operation BA has
agreed to provide to enable the case to be resolved more speedily and
effectively.
9. Anyone who has reason to suspect that a cartel is operating, should telephone
the OFT's cartel hotline 020 7211 8888 or email [email protected]. Companies
or individuals that wish to apply for leniency should contact the Director of
Cartel Investigations on 020 7211 8117.
10. Information about the US Department of Justice is available at
www.usdoj.gov/atr/
:-::-::-::-::-::-::-::-::-::-::-::-::-:
SPACE RESERVED FOR: Department of Justice impending fine later today...Estimated to be an additional £200m.
01 Aug 2007 14:03 GMT
...And here it is!! Though it seems to only be £150m rather than the £200m estimate.
U.S. DoJ SAYS BRITISH AIRWAYS <BAY.L> TO PAY $300 MLN TO SETTLE PRICE-FIXING PROBE
:-::-::-::-::-::-::-::-::-::-::-::-::-:
NB: BA Press Release/Response posted below by Gaza (post#5)
RNS Number:2659B
Office of Fair Trading
01 August 2007
113/07 1 August 2007
BRITISH AIRWAYS TO PAY RECORD £121.5m PENALTY IN
PRICE FIXING INVESTIGATION
British Airways has admitted collusion over the price of 'long-haul passenger
fuel surcharges' (surcharges) and will pay a penalty of £121.5m to be imposed by
the OFT, thus enabling the OFT to close its civil investigation and resolve this
case. The penalty will be the highest ever imposed by the OFT for infringements
of competition law, and demonstrates the determination of the OFT to deal
vigorously with anti-competitive behaviour.
British Airways has admitted that between August 2004 and January 2006, it
colluded with Virgin Atlantic over the surcharges which were added to ticket
prices in response to rising oil prices. Over that period, the surcharges rose
from £5 to £60 per ticket for a typical BA or Virgin Atlantic long-haul return
flight.
Virgin Atlantic is not expected to pay any penalty as it qualifies in principle
for full immunity under the OFT's leniency policy. Under this policy, a company
which has been involved in cartel conduct and which is the first to give full
details about it to the OFT will qualify for immunity from penalties in relation
to that conduct. In addition, any company staff involved in the price fixing
disclosed will qualify for immunity from criminal prosecution in relation to
that conduct. The OFT's investigation was prompted after Virgin Atlantic came
forward with information about price fixing with BA over the surcharges. British
Airways has also provided full co-operation with the OFT's investigation under
the leniency programme and this is reflected in the penalty announced today.
British Airways accepts the OFT's finding that on at least six occasions the two
companies discussed and/or informed each other about proposed changes to the
level of the surcharges, rather than setting levels independently as required
under clear and well-established competition law principles.
The OFT's investigation was conducted in parallel with a similar case brought by
the United States Department of Justice (DoJ). The investigations by the OFT and
DoJ were separate but the two agencies have consulted each other closely
throughout.
In addition to the investigation into British Airways' corporate conduct under
civil competition law, the OFT is also conducting a criminal investigation into
whether any individuals dishonestly fixed the levels of the surcharges - an
offence under the Enterprise Act. The corporate admission by British Airways
that it infringed civil competition law does not imply that any individuals
dishonestly fixed prices contrary to the Enterprise Act. The criminal
investigation is ongoing and no conclusions have been reached as to whether
criminal proceedings against individuals can or should be brought.
The OFT's infringement decision against BA will be taken and published in due
course. It will record the full findings in this case and the basis for the
calculation of the penalty to be imposed on British Airways.
Philip Collins, OFT Chairman said:
'This case, and the substantial penalty imposed, will send an important message
to corporate boards and business leaders about our intention to enforce the law,
and serves to remind companies of the substantial risks involved if they are
found to engage in such behaviour. It also illustrates how the OFT's leniency
programme enables companies to eliminate or reduce their exposure to penalties
by taking prompt and effective action. On a broader front, the OFT is committed
to strong and effective competition law enforcement, especially in relation to
price fixing and other hardcore infringements. Our commitment to enforcement
emphasises the importance of effective and comprehensive competition law
compliance led by boards and senior management and supported by effective risk
management systems and corporate governance.'
NOTES
1. Fuel surcharges, when set independently, do not infringe competition law.
Such surcharges were first introduced by each of BA and Virgin Airways in May
2004. The earliest evidence of collusion between the companies dates from August
2004.
2. The OFT confirmed its investigation into price coordination in relation to
long haul passenger flights to and from the UK on 22 June 2006.
3. The OFT's investigation was conducted under the Competition Act 1998 which
gives the OFT the power to impose penalties on companies of up to 10% of their
worldwide turnover for price fixing and other forms of anti-competitive
behaviour.
4. The Competition Act 1998 prohibits agreements, practices and conduct that may
have a damaging effect on competition in the UK. The Chapter I prohibition
covers anti-competitive agreements and concerted practices, that have the object
or effect of preventing, restricting or distorting competition in the UK (or a
part thereof). Its European counterpart, Article 81 of the EC Treaty, covers
equivalent agreements or practices which affect trade between EU Member States.
5. The Enterprise Act 2002 prohibits price-fixing and other cartel agreements
made dishonestly by individuals. The facts and matters requiring to be proved
are substantially different between the civil and criminal competition law
regimes. The corporate admission by BA does not imply that individuals have
committed criminal offences.
6. Under the OFT's leniency policy an undertaking may be granted immunity from
penalties or a significant reduction in penalty in return for reporting certain
categories of Competition Act infringement and assisting the OFT with its
investigation. Virgin Atlantic is expected to be granted immunity from penalties
as it informed the OFT of the infringement before the OFT had commenced its
investigation; BA has been granted a reduction in penalty.
7. In calculating financial penalties, the OFT takes into account a number of
factors including the seriousness of infringement, the relevant turnover and any
mitigating and/or aggravating factors. The basis of the OFT's considerations are
set out in 'OFT's guidance as to the appropriate amount of a penalty' - see OFT
website for more details.
8. The penalty will be payable following issue of an infringement decision to be
published in due course. The full details of the penalty calculation will be
included in the infringement decision. The level of penalty reflects not only
the granting of leniency to BA but also the additional co-operation BA has
agreed to provide to enable the case to be resolved more speedily and
effectively.
9. Anyone who has reason to suspect that a cartel is operating, should telephone
the OFT's cartel hotline 020 7211 8888 or email [email protected]. Companies
or individuals that wish to apply for leniency should contact the Director of
Cartel Investigations on 020 7211 8117.
10. Information about the US Department of Justice is available at
www.usdoj.gov/atr/
:-::-::-::-::-::-::-::-::-::-::-::-::-:
SPACE RESERVED FOR: Department of Justice impending fine later today...Estimated to be an additional £200m.
01 Aug 2007 14:03 GMT
...And here it is!! Though it seems to only be £150m rather than the £200m estimate.
U.S. DoJ SAYS BRITISH AIRWAYS <BAY.L> TO PAY $300 MLN TO SETTLE PRICE-FIXING PROBE
:-::-::-::-::-::-::-::-::-::-::-::-::-:
NB: BA Press Release/Response posted below by Gaza (post#5)
Last edited by jonnye; Aug 5, 2007 at 10:56 am Reason: Add DoJ additional Est fine of £200m. Thread title to be updated later today.
Aug 1, 2007, 12:14 am
#2
Join Date: Aug 2004
Posts: 476
The Office of Fair Trading.have imposed a fine of £121.5m on British Airways over the price of long-haul passenger fuel surcharges. The OFT says that British Airways has admitted that between August 2004 and January 2006, it colluded with Virgin Atlantic over the surcharges which were added to ticket prices in response to rising oil prices. Over that period, the surcharges rose from £5 to £60 per ticket for a typical BA or Virgin Atlantic long-haul return flight. The OFT and the US Department of Justice have been investigating alleged price-fixing on long-haul fuel surcharges since June last year. Virgin Atlantic is not expected to pay any penalty.
Aug 1, 2007, 12:15 am
#3
Join Date: Feb 2000
Location: Edinburgh
Programs: Still a lowly Blue with BA but inching towards Bronze. Managed to get to KLM Silver!
Posts: 4,308
The report on the BBC said BA had "agreed" with the OfT to pay the fine. This all relates to the fuel surcharge price fixing. The US authorities are expected to announce their fine this afternoon; likely to be in the region of £200 million.
Aug 1, 2007, 12:21 am
#5
Join Date: Feb 2000
Location: Edinburgh
Programs: Still a lowly Blue with BA but inching towards Bronze. Managed to get to KLM Silver!
Posts: 4,308
BA Press Release
OFT/DOJ COMPETITION INVESTIGATIONS RESOLVED
British Airways announced today (August 1) that it has agreed a resolution with the UK Office of Fair Trading (OFT) and entered into a plea agreement with the United States Department of Justice (DoJ) on fines relating to anti-competitive activity in the company's longhaul passenger and cargo businesses.
Under the terms of the agreements, British Airways has agreed to pay a fine of £121.5 million to the OFT and a DoJ fine which will be announced by the DoJ early this afternoon. The sum of the combined fine is consistent with our guidance and provision of £350 million.
This resolves the OFT's and the DoJ's investigation of British Airways.
British Airways' chief executive, Willie Walsh said; "I want to reassure our passengers that they were not overcharged. Fuel surcharges are a legitimate way of recovering costs.
"However this does not in any way excuse the anti competitive conduct by a very limited number of individuals within British Airways.
"Anti-competitive behaviour is entirely unacceptable and we condemn it unreservedly.
"We have a long standing competition compliance policy which requires all staff to comply with the law at all times. I am satisfied that we have the right controls in place. However, it is deeply regrettable that some individuals ignored our policy."
The OFT's investigation turned on conversations between individuals at Virgin Atlantic and British Airways' during which information was exchanged on proposed changes to their respective longhaul passenger fuel surcharges in response to fluctuating oil prices.
In 2006 Virgin Atlantic went to the OFT and revealed its part in these conversations.
As the first applicant under the terms of the OFT's leniency policy, Virgin Atlantic qualified for conditional immunity and as a result has not been required to pay any penalty.
British Airways responded swiftly to the investigation co-operating fully with the OFT and the penalty has been reduced to reflect this.
Fines for breaches of UK competition law are calculated in accordance with the OFT's Fining Guidelines, and may be up to 10 per cent of a company's worldwide turnover. The fine based on these Guidelines, represents just over one per cent of British Airways' group turnover.
In parallel, the US plea agreement with the DOJ brings to an end their investigations of British Airways with respect to its long haul passenger and cargo businesses.
The OFT and DoJ continue with their criminal investigation into the conduct of individuals.
ends
August 1, 2007 079/KG/07
Note to editors:
The detailed analysis of the fines will be made public by the OFT and DOJ in due course.
Under the US law, criminal fines for Sherman Act infringements cannot exceed a sum which is the greater of:
· $100 million
· twice the pecuniary gain derived from the violation
· twice the pecuniary loss suffered by consumers
The OFT's investigation was conducted under the Competition Act 1998 which gives the OFT the power to impose penalties on companies of up to 10 per cent of their worldwide turnover for price fixing and other forms of anti competitive behaviour.
Under IAS 37, the airline made a provision of £350 million for settlement of the competition investigations in its 2006/7 accounts.
The provision in respect of competition investigations relates to potential Government fines in the following jurisdictions in relation to cargo fuel surcharges: USA, Europe, Australia, Canada, New Zealand and South Africa and, in relation to long haul passenger fuel surcharges: USA and the UK. It also relates to civil claims in the USA, Australia and Canada. Under IAS 37 the provision represents the estimate of the amount to settle competition authority and civil claims at the Balance Sheet date, but recognises that the final amount required to pay all claims and fines is subject to uncertainty
Summary Statement of Facts
These are the essential matters admitted by BA as to its infringement of civil competition law. Neither the names nor positions of any individuals involved directly or indirectly in the contacts are or will be disclosed by BA in view of the OFT's ongoing criminal investigation. Communications were made by a limited number of individuals.
Introduction of the PFS, May 2004
1. The introduction by each of BA and VAA of the long-haul passenger fuel surcharge ("PFS") in May 2004 is not alleged to have been the subject of collusive contacts.
First Increase, August 2004
2. BA and VAA exchanged information on Friday 6 August 2004 regarding the intentions of their respective organisations to increase the PFS. BA told VAA of BA's intention to increase its PFS to £6.
3. Thereafter, on Monday 9 August 2004, both BA and VAA announced increases in their respective PFS to £6, as they had discussed, with effect from 11 August 2004.
Second Increase, October 2004
4. BA understands that there may have been attempts by VAA to contact BA prior to the second increase, but these were not successful.
5. BA announced on 8 October 2004 an increase in its PFS to £10. VAA announced a corresponding increase in its PFS to £10 on the same date.
Third Increase, March 2005
6. In two sets of calls on 21 March 2005, BA and VAA exchanged information concerning proposed increases in their respective organisations' PFS. BA informed VAA that BA intended to increase its PFS to £16. VAA confirmed to BA the timing and amount of the PFS increase which VAA was going to announce.
7. Later on 21 March 2005 VAA announced to the press an increase in its PFS to £16 with effect from 24 March, as had been discussed. On the following day, BA announced an increase in its PFS by the same amount with effect from 28 March 2005.
Fourth Increase, June 2005
8. BA informed VAA on 23 June 2005 that BA was going to announce the following morning an increase in its PFS to £24.
9. On Friday 24 June 2005 BA announced an increase in its PFS to £24, as BA had informed VAA, with effect from 27 June 2005. Later the same day, VAA announced an identical increase in its PFS to £24.
10. An email was sent from VAA to BA shortly before VAA's announcement, to which BA replied early the following morning.
Fifth Increase, September 2005
11. On 5 September 2005, VAA informed BA during a telephone call that VAA intended to increase its PFS and to be the first to announce the increase on this occasion. It is likely that VAA informed BA that VAA would increase its PFS specifically to £30.
12. On 6 September 2005 VAA announced an increase in its PFS to £30 with effect from 7 September, as VAA had informed BA. On 8 September 2005, BA announced an increase in its PFS to £30, with effect from 12 September 2005.
VAA Reduction, November 2005
13. VAA informed BA on 18 November 2005 that VAA was about to announce a reduction in its PFS to £25.
14. Shortly afterwards, VAA announced a reduction in its PFS to £25, as VA had informed BA.
15. A further contact from VAA to BA relating to this reduction took place following the announcement.
VAA Increase, January 2006
16. VAA informed BA on 6 January 2006 that VAA intended to increase its PFS to £30.
17. Later that same day VAA announced an increase in its PFS to £30, as VAA had forewarned BA. BA did not adjust the level of its PFS in response.
Certain information included in these statements is forward-looking and involves risks and uncertainties that could cause actual results to differ materially from those expressed or implied by the forward looking statements.
Forward-looking statements include, without limitation, projections relating to results of operations and financial conditions and the Company's plans and objectives for future operations, including, without limitation, discussions of the Company's Business Plan programs, expected future revenues, financing plans and expected expenditures and divestments. All forward-looking statements in this report are based upon information known to the Company on the date of this report. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
It is not reasonably possible to itemize all of the many factors and specific events that could cause the Company's forward looking statements to be incorrect or that could otherwise have a material adverse effect on the future operations or results of an airline operating in the global economy. Fuller information on some factors which could result in material difference to the results is available in the company's Annual Report for the year ended 31 March 2007, which is available on www.bashareholders.com.
British Airways announced today (August 1) that it has agreed a resolution with the UK Office of Fair Trading (OFT) and entered into a plea agreement with the United States Department of Justice (DoJ) on fines relating to anti-competitive activity in the company's longhaul passenger and cargo businesses.
Under the terms of the agreements, British Airways has agreed to pay a fine of £121.5 million to the OFT and a DoJ fine which will be announced by the DoJ early this afternoon. The sum of the combined fine is consistent with our guidance and provision of £350 million.
This resolves the OFT's and the DoJ's investigation of British Airways.
British Airways' chief executive, Willie Walsh said; "I want to reassure our passengers that they were not overcharged. Fuel surcharges are a legitimate way of recovering costs.
"However this does not in any way excuse the anti competitive conduct by a very limited number of individuals within British Airways.
"Anti-competitive behaviour is entirely unacceptable and we condemn it unreservedly.
"We have a long standing competition compliance policy which requires all staff to comply with the law at all times. I am satisfied that we have the right controls in place. However, it is deeply regrettable that some individuals ignored our policy."
The OFT's investigation turned on conversations between individuals at Virgin Atlantic and British Airways' during which information was exchanged on proposed changes to their respective longhaul passenger fuel surcharges in response to fluctuating oil prices.
In 2006 Virgin Atlantic went to the OFT and revealed its part in these conversations.
As the first applicant under the terms of the OFT's leniency policy, Virgin Atlantic qualified for conditional immunity and as a result has not been required to pay any penalty.
British Airways responded swiftly to the investigation co-operating fully with the OFT and the penalty has been reduced to reflect this.
Fines for breaches of UK competition law are calculated in accordance with the OFT's Fining Guidelines, and may be up to 10 per cent of a company's worldwide turnover. The fine based on these Guidelines, represents just over one per cent of British Airways' group turnover.
In parallel, the US plea agreement with the DOJ brings to an end their investigations of British Airways with respect to its long haul passenger and cargo businesses.
The OFT and DoJ continue with their criminal investigation into the conduct of individuals.
ends
August 1, 2007 079/KG/07
Note to editors:
The detailed analysis of the fines will be made public by the OFT and DOJ in due course.
Under the US law, criminal fines for Sherman Act infringements cannot exceed a sum which is the greater of:
· $100 million
· twice the pecuniary gain derived from the violation
· twice the pecuniary loss suffered by consumers
The OFT's investigation was conducted under the Competition Act 1998 which gives the OFT the power to impose penalties on companies of up to 10 per cent of their worldwide turnover for price fixing and other forms of anti competitive behaviour.
Under IAS 37, the airline made a provision of £350 million for settlement of the competition investigations in its 2006/7 accounts.
The provision in respect of competition investigations relates to potential Government fines in the following jurisdictions in relation to cargo fuel surcharges: USA, Europe, Australia, Canada, New Zealand and South Africa and, in relation to long haul passenger fuel surcharges: USA and the UK. It also relates to civil claims in the USA, Australia and Canada. Under IAS 37 the provision represents the estimate of the amount to settle competition authority and civil claims at the Balance Sheet date, but recognises that the final amount required to pay all claims and fines is subject to uncertainty
Summary Statement of Facts
These are the essential matters admitted by BA as to its infringement of civil competition law. Neither the names nor positions of any individuals involved directly or indirectly in the contacts are or will be disclosed by BA in view of the OFT's ongoing criminal investigation. Communications were made by a limited number of individuals.
Introduction of the PFS, May 2004
1. The introduction by each of BA and VAA of the long-haul passenger fuel surcharge ("PFS") in May 2004 is not alleged to have been the subject of collusive contacts.
First Increase, August 2004
2. BA and VAA exchanged information on Friday 6 August 2004 regarding the intentions of their respective organisations to increase the PFS. BA told VAA of BA's intention to increase its PFS to £6.
3. Thereafter, on Monday 9 August 2004, both BA and VAA announced increases in their respective PFS to £6, as they had discussed, with effect from 11 August 2004.
Second Increase, October 2004
4. BA understands that there may have been attempts by VAA to contact BA prior to the second increase, but these were not successful.
5. BA announced on 8 October 2004 an increase in its PFS to £10. VAA announced a corresponding increase in its PFS to £10 on the same date.
Third Increase, March 2005
6. In two sets of calls on 21 March 2005, BA and VAA exchanged information concerning proposed increases in their respective organisations' PFS. BA informed VAA that BA intended to increase its PFS to £16. VAA confirmed to BA the timing and amount of the PFS increase which VAA was going to announce.
7. Later on 21 March 2005 VAA announced to the press an increase in its PFS to £16 with effect from 24 March, as had been discussed. On the following day, BA announced an increase in its PFS by the same amount with effect from 28 March 2005.
Fourth Increase, June 2005
8. BA informed VAA on 23 June 2005 that BA was going to announce the following morning an increase in its PFS to £24.
9. On Friday 24 June 2005 BA announced an increase in its PFS to £24, as BA had informed VAA, with effect from 27 June 2005. Later the same day, VAA announced an identical increase in its PFS to £24.
10. An email was sent from VAA to BA shortly before VAA's announcement, to which BA replied early the following morning.
Fifth Increase, September 2005
11. On 5 September 2005, VAA informed BA during a telephone call that VAA intended to increase its PFS and to be the first to announce the increase on this occasion. It is likely that VAA informed BA that VAA would increase its PFS specifically to £30.
12. On 6 September 2005 VAA announced an increase in its PFS to £30 with effect from 7 September, as VAA had informed BA. On 8 September 2005, BA announced an increase in its PFS to £30, with effect from 12 September 2005.
VAA Reduction, November 2005
13. VAA informed BA on 18 November 2005 that VAA was about to announce a reduction in its PFS to £25.
14. Shortly afterwards, VAA announced a reduction in its PFS to £25, as VA had informed BA.
15. A further contact from VAA to BA relating to this reduction took place following the announcement.
VAA Increase, January 2006
16. VAA informed BA on 6 January 2006 that VAA intended to increase its PFS to £30.
17. Later that same day VAA announced an increase in its PFS to £30, as VAA had forewarned BA. BA did not adjust the level of its PFS in response.
Certain information included in these statements is forward-looking and involves risks and uncertainties that could cause actual results to differ materially from those expressed or implied by the forward looking statements.
Forward-looking statements include, without limitation, projections relating to results of operations and financial conditions and the Company's plans and objectives for future operations, including, without limitation, discussions of the Company's Business Plan programs, expected future revenues, financing plans and expected expenditures and divestments. All forward-looking statements in this report are based upon information known to the Company on the date of this report. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
It is not reasonably possible to itemize all of the many factors and specific events that could cause the Company's forward looking statements to be incorrect or that could otherwise have a material adverse effect on the future operations or results of an airline operating in the global economy. Fuller information on some factors which could result in material difference to the results is available in the company's Annual Report for the year ended 31 March 2007, which is available on www.bashareholders.com.
Aug 1, 2007, 12:26 am
#6
FlyerTalk Evangelist
Join Date: Jun 2004
Location: LON, ACK, BOS..... (Not necessarily in that order)
Programs: **Mucci Diamond Hairbrush** - compared to that nothing else matters (+BA Bronze)
Posts: 15,132
Well any guesses as to whether the surcharge will go up further in light of this?
Aug 1, 2007, 12:44 am
#7
Original Poster
Join Date: Jun 2001
Location: London, UK / (TLV), Israel
Programs: BA Gold (GGL/CCR), *A Gold - TAP, SkyTeam E+, IHG Diamond AMB, HH Diamond, Sixt PL, GE/TSA Pre
Posts: 1,663
BRITISH AIRWAYS PLC <BAY.L> SAYS THE SUM OF COMBINED OFT AND DOJ FINE TO BE CONSISTENT WITH GUIDANCE AND PROVISION OF 350 MLN STG
This is all pending an appeal.
Oh well....good bye magic 10%!!
!
This is all pending an appeal.
Oh well....good bye magic 10%!!
!
Aug 1, 2007, 12:56 am
#10
Join Date: Jul 2005
Location: Scotland
Programs: BA Gold, Marriott Lifetime Titanium
Posts: 2,447
What chance a class action suit on behalf of us poor mugs who have paid over the odds.
Alternately do you think I can claim back some of my fuel surcharges in the small claims court?
Alternately do you think I can claim back some of my fuel surcharges in the small claims court?
Aug 1, 2007, 1:02 am
#11
Join Date: Aug 2004
Location: WD5, UK
Programs: BA, QR, OW loyal.
Posts: 1,415
This really is corporate and individual stupidity of a galactic kind. Having to spend shareholders money on these sort of fines is really beyond belief in this business environment. I've worked for big multi's for years now and we have had this anti-competitive stuff drummed into us for ages.
I assume ...
...means the US authorities kicks into touch any chance of BA execs being hauled into the US courts like the "Nat West Three."
Lucky bunnies.
I assume ...
In parallel, the US plea agreement with the DOJ brings to an end their investigations of British Airways with respect to its long haul passenger and cargo businesses.
Lucky bunnies.
Aug 1, 2007, 1:08 am
#13
Join Date: Apr 2005
Location: UK
Programs: IC Hotels Spire, BA Gold
Posts: 8,668
Aug 1, 2007, 1:26 am
#14
Join Date: Feb 2006
Posts: 470
So where does BA find £350 mil from- reserves? contingency? profits? virgin? us? or the fuel surcharge fairy!
Aug 1, 2007, 1:38 am
#15
Join Date: Jan 2007
Posts: 396
One place it will not come from is fuel surcharges, or surcharges of any kind. Basic economics say that BA is already charging as high a price as the market will bear (and by manipulating the market in 04-06, an even higher price...). If they could charge more they of course already would be doing so. The fine(s) will come out of profits, both past (unjustly earned as a result of the higher fuel surcharges) and future. VS escaped cos they fessed up to the arrangement and shopped BA.