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BA executives charged in price fixing case

LONDON (AP) — One current and three former executives of British Airways were charged with cartel offences by the Office of Fair Trading yesterday for allegedly fixing fuel surcharge prices on long-haul flights.

The OFT said that BA head of sales Andrew Crawley, former commercial director Martin George, former communications head Iain Burns and former UK and Ireland sales chief Alan Burnett will appear in court next month to face the charges.

All four have been charged with "having dishonestly agreed with others to make or implement arrangements which directly or indirectly fixed the price for the supply in the UK of passenger air transport services by British Airways and Virgin Atlantic Airways."

BA has already been fined a total of around US$550 million by British and US authorities after admitting to colluding with rival Virgin Atlantic over fuel surcharges on long-haul flights between August 2004 and January 2006.

George and Burns resigned in 2006, while Burnett retired the same year.

The City of London magistrates court confirmed that the quartet are listed to appear on September 24.

The four are part of a group of 10 past and present BA staff who have been refused immunity under a plea agreement between the airline and the US Department of Justice over the price-fixing.

Virgin was granted immunity after bringing the matter to the attention of the OFT.

Fuel surcharges, which are added on to standard ticket prices, were introduced to cover rising fuel costs. Between 2004 and 2006, fuel surcharges rose from about £5 ($10) to about £60 ($120) per ticket for a round-trip long-haul flight on BA or Virgin.

The price-fixing cartel led some 11 million BA customers to overpay for tickets at a cost of around £100 million ($200 million).

The OFT found that BA and Virgin discussed proposed fuel surcharges on at least six occasions over the year and a half to January 2006. Soon after that, Virgin went to the authorities.

BA's £121.5 million ($246 million) fine from the OFT was the largest ever imposed by the competition watchdog. The US Department of Justice fine of $300 million was 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.