Virgin Atlantic Exposes British Airways Fuel Surcharge Price-Fixing

In June 2006, Richard Branson's airline, Virgin Atlantic, became involved in a competition investigation concerning fuel surcharge price-fixing between Virgin Atlantic and British Airways. The investigation centred on allegations that representatives of the two competing airlines had exchanged information and coordinated passenger fuel surcharges on long-haul flights. Virgin Atlantic brought the conduct to the attention of competition authorities, prompting investigations into arrangements that had affected airline ticket pricing between August 2004 and January 2006. The allegations concerned additional fuel charges imposed on passengers during a period of rising global oil prices. Fuel surcharges were added to airline ticket prices to help carriers recover increased operating costs. However, coordination between competing airlines over these charges breached competition rules because airlines were expected to determine their prices independently. The investigation focused on communications between employees of British Airways and Virgin Atlantic about the timing and level of surcharge increases. Virgin Atlantic approached the United Kingdom's Office of Fair Trading (OFT) in June 2006 and cooperated with investigators under the authority's leniency programme. This cooperation enabled the airline to qualify for immunity from financial penalties in the UK investigation. British Airways subsequently faced regulatory action over its participation in the unlawful coordination.