LONDON - British Airways has been hit with a record fine of £270 million ($720 million) after admitting to anti-competitive behaviour by fixing the price of fuel surcharges for long-haul flights and cargo with its competitors.
BA has already booked a £350 million provision related to the investigationby the Office of Fair Trading and the United States Department of Justice but maintains customers were not out of pocket.
Korean Airlines was fined US$300 million ($394 million), forcing it to post its first loss in two years.
BA chief executive Willie Walsh said: "Customers were not overcharged. Fuel surcharges are a legitimate way of recovering costs. However, this does not excuse the anti-competitive conduct by some employees."
However, regulators disagreed the airline's behaviour had not harmed customers. Philip Collins, chairman of the OFT, said: "This case, and the penalty imposed, will send a message about our intention to enforce the law."
Scott Hammond, the US deputy assistant Attorney-General, accused the "conspirators of foiling free market competition".
BA has admitted colluding with Virgin Atlantic when setting the level for fuel surcharges added on to the cost of airline tickets to factor in higher oil costs. Between August 2004 and January 2006, BA and Virgin met several times to discuss impending changes to fuel surcharges, which rose from £5 to £60 over that period.
Virgin Atlantic escaped punishment after blowing the whistle on the collusion but BA was fined £121.5 million in the UK and US$300 million in the US. The airline faces more investigations on price fixing.
