The Competition Commission has ﬁned British Airways Plc (BA Plc) R21,7 million for colluding with Virgin Atlantic Airways Limited (Virgin Atlantic) to ﬁx a component of ticket prices on passenger ﬂights between United Kingdom and South Africa.
The Commission initiated an investigation against BA Plc and Virgin Atlantic in 2008 in respect of alleged price ﬁxing of fuel surcharges. Pursuant to its investigation, the Commission found that during August 2004 to January 2006, BA Plc and Virgin Atlantic coordinated their pricing in relation to their respective fuel surcharge rates in the international market for passenger airline services. This conduct was facilitated through the exchange of pricing and other commercially sensitive information. The Commission found that this conduct was in contravention of section 4(1)(b)(i) of the Competition Act and referred the matter to the Competition Tribunal for adjudication.
BA Plc subsequently entered into a settlement agreement with the Commission. As part of the settlement agreement reached, BA Plc admitted to participating in the prohibited practice, agreed that in future it will refrain from engaging in the same conduct and initiated a compliance programme designed to ensure that all relevant employees and directors comply with the obligations under the Competition Act.
In 2012, BA Plc reached a similar settlement agreement with the Commission after British Airways World Cargo (BAWC), a division of BA Plc, exchanged commercially sensitive information with various other air cargo carriers. The exchange of information resulted in ﬁxing the price of fuel surcharges in the international market for air freight and/or cargo services. This conduct attracted an administrative penalty of GBP871,116.50.