British Airways Price-Fixing: Lawsuit is Latest Action
On Sunday 26th August 2007, it came to light that British Airways may now have to make a multi-million pound legal settlement in respect of the fuel price fixing scandal, which was covered in previous News Items in our sister publication, Airport International. The lawsuit is understood to include a number of blue-chip firms based in Europe, Volvo, TNT and Ikea among them. It has also been noted that British Airways has reserved an amount of approximately $700 million to meet the possible settlement now expected.
BA has already made a significant payment of $300 million to the US Department of Justice, of which $200 million related to price-fixing within its cargo division, and the remainder was in respect of passenger flights. As per documentation now in the hands of a district court in the US, this new lawsuit is concerned with shipments, on which a value of $29 million has been placed. In line with a plea agreement forged between BA and prosecutors in the US, ten current and former executive-level employees of the flagship UK carrier are considered not immune from being prosecuted. Among these ten is the present Director of Operations at BA, while it is understood that, according to the airline, four of them still work there.
At the beginning of August, the Chief Executive of BA, Willie Walsh, provided assurance to the public and media alike that the airline's price-fixing was the result of action by a "very limited number of individuals". However, since then, information issued by the US Department of Justice has confirmed the depth into which the subsequent inquiry went. The department cited both BA's ex-Commercial Director, Martin George, and the previous Head of Communications, Iain Burns, as yardsticks which the investigation passed beyond.
Confirmation was provided by the DoJ that it was "carving out" ten present and ex-senior executives from a deal of immunity, designed to determine issues of BA's liability in America. These figures, who have not yet been charged, may end up behind bars as a result of criminal prosecution.
Freight International will cover further developments in this case as we get the facts.
Source - Freight International's US Correspondent
Recent related News Items:
Qantas Reserves $40m Pending Freight Price-Fixing Fine
British Airways Price-Fix Fine Increases
