BA and OFT set to clash head on

by William ASTON on August 4, 2011

British Airways is likely to enter a showdown with OFT, the Office of Fair Trading, after refusing to meet a £121.5m fine that it was slapped with for allegedly fixing prices of fuel surcharges.

The flagship carrier, now part of the International Airlines Group - a company formed after the merger with Iberia of Spain - was hit with its fine in 2007. It will continue to withhold payment though following the watchdog’s failure to bring criminal cartel prosecutions against four current and ex-BA executives. Just days into the criminal trial, the watchdog’s case started falling apart after the emergence of over 70,000 new emails not disclosed to the defence.

IAG’s chief executive, Willie Walsh, said that he has no intention to pay the fine unless the Office of Fair Trading can provide fresh evidence that proves the airline’s wrongdoing. We haven’t agreed to make any payments with them and because of this, the OFT fine remains outstanding, said Walsh,

We explained that we needed disclosure of evidence before being able to agree anything with them, he continued, however, given the way the trial collapsed, it is our feeling that there aren’t any grounds such a heavy fine.

Walsh’s comments definitely mean that he is on a collision course to clash with John Fingleton, OFT’s chief executive, who vowed to hound BA for the entire amount in the aftermath of the trial. BA was had the finger pointed at it by the Office or Fair Trading of developing a conspiracy with executives from Virgin Atlantic to fix fuel surcharge elements of ticket prices.

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