Thursday, June 22, 2006

BA Center of Price-Fixing Investigation

Today's news reads that British Airways is being investigated by the UK Office of Fair Trading (OFT) and the US Deparment of Justice (DOJ) for allegedly fixing fuel surcharges on some of its longer flights in and out of the UK.

According to the BBC, passengers on long-haul BA flights currently pay a £35 fuel surcharge for a one-way ticket, compared with a £37 surcharge on AA flights in and out of the UK. While American is not under investigation at this time, it, United Airlines and Virgin Atlantic have stated that they are helping with the investigation. At this time, no other airlines have been investigated. If BA is found guilty, they could be fined up to 10% of worldwide sales, according to the BBC - which was £8.5 billion last year.

Of course, while the financial penalties for price-fixing may be severe, the fallout doesn't necessarily extend over to the flying public. After all, who's going to quit flying Airline X just because they were involved in price-fixing? While it's no doubt the wrong thing to do, and airlines can pay a huge financial price for it, I don't think being convicted of price fixing ranks high up on my list when I choose what airline to fly on. Safety, service, and price are factors that count more.

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