"British Airways Spared Sky-High Fine"

Thursday, August 23, 2007

British Airways Spared Sky-High Fine
By MATT APUZZO
The Associated Press

 
WASHINGTON - The Justice Department is giving Britain's largest airline a
break, even as it faces one the largest antitrust fines in years.

Representatives of British Airways PLC are scheduled to plead guilty
Thursday to two counts of conspiracy and face a likely fine of $300 million
for colluding with rival Virgin Atlantic over fuel surcharges on
international flights.

Federal prosecutors, in court documents filed last week, said the fines
could have been as high as nearly $900 million if not for the airline's
cooperation in the investigation.

"As a foreign corporation with headquarters outside the United States, BA
could have retained highly relevant documents in its foreign offices and
refused to cooperate," prosecutors wrote. "It chose, however, to assist the
United States early in its investigation in a highly significant and useful
way."

Earlier this month, authorities in London and Washington announced nearly
$550 million in combined fines for the airline as part of parallel
trans-Atlantic investigations.

Britain's Office of Fair Trading fined the company $246 million and a
federal judge is expected to sign off on the $300 million U.S. fine
Thursday.

As part of its plea deal, British Airways is admitting that between mid-2004
and early 2006, it colluded with Virgin Atlantic over the surcharges, which
were added to fares in response to rising oil prices. Virgin Atlantic is not
named in the Justice Department case and is not expected to face a fine in
Britain because it reported the misconduct to authorities.

Between 2004 and 2006, fuel surcharges rose from about $10 to about $120 per
ticket for a round-trip long-haul flight on BA or Virgin.

The $300 million in criminal fines were the second-largest antitrust
sanction by the Justice Department since 1995. The largest antitrust fine,
$500 million, was against vitamin giant F. Hoffman-La Roche in 1999 in a
price-fixing case.

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