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BA鈥檚 pricey chatter

• Robert Peston
• 18 May 07, 08:30 AM

has to cover possible fines to be levied by regulators and potential damages payable in civil suits for alleged 鈥渁nti-competitive activity鈥� in respect of the levying of fuel surcharges.

Confused? Well I think what has happened can be paraphrased as 鈥渃areless talk costs big money.鈥� BA has completed an internal enquiry and has come to the conclusion that certain unnamed employees said things to competitors that 鈥� under rules to prevent collusion and price-fixing 鈥� shouldn鈥檛 have been said.

Whether prices were actually rigged to the benefit of the airline is another matter entirely. I wouldn鈥檛 be at all surprised if no fuel surcharges were actually fixed in a way that damaged customers.

But it鈥檚 almost a matter of life-and-death to honour competition regulations to the letter in a world where competition watchdogs from Washington to London to Brussels are straining at the leash to bite. International companies like BA are governed by strict prohibitions against anti-competitive behaviour and potential fines are huge.

Just imagine being the employee or employees who chatted to those competitors. BA has said this morning that they鈥檝e almost certainly cost the company and its shareholders 拢350m. Yikes!

BA鈥檚 humiliation is also another astonishing chapter in the epic battle between Sir Richard Branson and the flag-carrying airline. As , it was Branson鈥檚 that originally blew the whistle on BA to the competition authorities for allegedly wanting to discuss fuel surcharges. But even Branson may not have expected the financial cost to BA to become quite so stupendous.

UPDATE 19:30: Passengers and shippers may indeed have been damaged by price fixing. But to be clear what BA has admitted, it is that its staff had inappropriate conversations with competitors about fuel surcharges.

Whether these conversations actually resulted in prices being manipulated 鈥� and if so by how much 鈥� has not been disclosed.

Even so, the mere fact that BA staff had these conversations is appalling for a business that has always claimed to put the interests of the customer first.

And if it were to turn out that any detriment has been more acute to cargo customers, rather than to passengers, well BA should still hang its head in shame.

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