BA Communications Chief Suspended in Price Fixing Probe
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BA Communications Chief Suspended in Price Fixing Probe

British Airways, facing an investigation into price-fixing by competition regulators on both sides of the Atlantic, has suspended its communications director Iain Burns.

Paul Holmes

LONDON—British Airways, facing an investigation into price-fixing by competition regulators on both sides of the Atlantic, has suspended its communications director Iain Burns.

Newspaper reports suggest that investigators are focusing on a number of alleged telephone conversations between Burns and his counterparts at the public relations department of bitter rival Virgin Atlantic, which reports suggest were taped and later supplied to the authorities by executives at Virgin.

It is believed that Burns attempted to learn from the telephone conversations how Virgin would respond to new fuel charges ahead of their introduction. Burns then relayed his findings to Martin George, the company’s commercial director, to whom Burns reports. George has also been suspended while the investigation continues.

The U.K.’s Office of Fair Trading and the U.S. Department of Justice are investigating alleged collusion between BA and other carriers, who have in recent years added surcharges to ticket prices to compensate for the rising cost of aviation fuel. These surcharges have been increased seven times and on long-haul flights now add around $125 dollars to the cost of a return trip.

BA could be fined up to $1.5 million if the alleged wrongdoing is found to be widespread. And a criminal investigation could lead to a five year prison sentence for anyone involbed.

Financial analysts suggested that the suspensions indicated that there was some fire behind the smoke. “Ordinarily we would not be overly concerned by the mere launch of an investigation, given that this does not automatically mean that illegal activity has been confirmed,” said Gerald Khoo, aviation analyst at Oriel Securities. “However, of more concern is that Martin George and Iain Burns have been given leave of absence for the duration of the investigation. This is unusual, and thus somewhat concerning. Rightly or wrongly, this gives the impression that there may be some substance to the allegations.”

Shares in the airline dropped by more than 5.5 percent following BA’s announcement that it was under investigation, wiping ₤200 million off the value of the company.

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