British Airways Executives Placed on Leave Amid Price-Fixing Probe

Strategic Insights -

British and U.S. authorities are investigating alleged price-fixing in passenger fares and fuel surcharges by British Airways PLC and other airlines. Two senior executives, commercial director Martin George and head of communications Iain Burns, have been placed on leave while the carrier assists the Office of Fair Trading and the U.S. Department of Justice. High fuel prices have led airlines to raise the surcharge that passengers pay on long-haul flights, with BA customers now paying £70 ($129) on a round-trip ticket from London to New York.

Key Takeaways:

  • British Airways PLC has placed two senior executives, Martin George and Iain Burns, on leave amid a probe into alleged price-fixing in passenger fares and fuel surcharges.
  • The Office of Fair Trading and the U.S. Department of Justice are conducting a joint investigation into the matter.
  • Other airlines, including Virgin Atlantic, United Airlines, and American Airlines, have stated they are cooperating with the investigation.
  • The probe is in its early stages, with no assumption of infringement of competition law until the investigation is complete.
  • British Airways has stated it is assisting the regulators with the probe, but has declined to provide further information.
  • High fuel prices have led airlines to raise the surcharge on long-haul flights, with British Airways customers now paying £70 ($129) on a round-trip ticket from London to New York.
  • Delta, Ryanair Holdings PLC, bmi, Continental, Lufthansa, Finnair, KLM, Icelandair, and SAS have denied being investigated.
  • British Airways shares have tumbled 5.9 percent to close at £3.46 ($6.38) on the London Stock Exchange.

Statistics:

  • 2 senior executives (Martin George and Iain Burns) have been placed on leave.
  • 5.9 percentage point decline in British Airways shares on the London Stock Exchange.
  • Fuel surcharge on a round-trip ticket from London to New York: £70 ($129).
  • 10 airlines (including British Airways) have stated they are cooperating with the investigation.

Sources:

  • "British Airways Placed Two Executives on Leave Amid Price-Fixing Probe", The Associated Press, London.
  • OFT statement, June 13.
  • U.S. Department of Justice statement, June 13.
  • London Stock Exchange data, June 14.