Gas Week

EWN Publishing

Phone call that cost British Airways all of £270 million ($643 million); criminal inquiries to come: Departments could by themselves co-ordinate the setting of fuel surcharges

Posted by gasweek on 26 September, 2007

On 9 August 2004, the airline’s then head of communications, Iain Burns, contacted his opposite numbers at Virgin Atlantic and said British Airwaves was minded to increase the levy it put on tickets to cover the rising costs of oil – its fuel surcharge, reported The Australian Financial Review (3/8/2007, p. 55).

Surcharge climbed from £2.50 to £30 : Simultaneous announcements of price rises followed, establishing an illicit relationship that involved six more conversations and announcements by January 2006, while the surcharge climbed from £2.50 to £30 for a one-way ticket. BA declined to comment on speculation that two other executives, including an employee of its cargo division, have been suspended pending the outcome of the criminal investigations, which are also looking at collusion over fuel surcharges on cargo flights.

Setting of fuel surcharges a major commercial responsibility: The criminal inquiries to come will examine whether PR departments could by themselves coordinate the setting of fuel surcharges – a major commercial responsibility in such a competitive industry. The chief executive of Qantas, Geoff Dixon, said on 1 August that the airline had yet to determine any liability from investigations into alleged air freight price fixing involving Qantas.

The Australian Financial Review, 3/8/2007, p. 55

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