Allegations of Price Fixing could cost Airlines over 1.5 billion dollars

United Airlines, American Airlines, British Airways and Virgin Atlantic are named in a related price fixing suit...

A lawsuit filed recently in federal court in New York alleges that four transatlantic airlines - United Airlines, American Airlines, British Airways (BA), and Virgin Atlantic - fixed prices on fuel surcharges on flights between the United States and the United Kingdom. The lawsuit claims there was a "global conspiracy to fix, raise, maintain and/or stabilize prices for long-haul passenger flights to and from the UK".

The suit comes on the heels of revelations that British Airways is under investigation in the United States and the United Kingdom for price fixing fuel surcharges on long-haul flights. The other airlines named in the suit claim that only British Airways is facing scrutiny for price fixing.

Dramatic series of events

In what appeared to be a coordinated effort, the FBI raided British Airway's New York offices on the same day the British government's Office of Fair Trading investigators entered BA headquarters in Heathrow. U.K. media outlets report that Virgin Atlantic gave the Office of Fair Trading a tip. It says Virgin was "sounded out" by BA about raising the fuel surcharge. In a series of phone calls, BA's head of communications Iain Burns and his counterparts at Virgin Atlantic discussed raising fuel surcharges. During these calls, Burns reportedly attempted to find out from Virgin how it would react if BA hiked its fuel surcharges. Details on Virgin's role beyond that point are vague.

British Airways publicly admitted that they were under investigation for colluding to fix the fuel surcharges. They then put two of their executives - commercial director Martin George and head of communications Iain Burns - on leave of absence.

Only the latest allegations of price fixing

Back in March, laywersandsettlements.com [reported on 15 class action lawsuits] filed against a number of airlines for price fixing and overcharging cargo-related fees. Various corporations filed the suits, complaining that the airlines conspired to impose and raise fuel and security surcharges on cargo shipped to and from the U.S. since 2000. The setting of fuel surcharges on cargo flights has been the subject of an investigation by the Department of Justice, the European Commission and regulators in Asia since February of this year.

Big money on both sides of the Atlantic

If British Airways is found guilty of the price fixing charges in Britain, civil lawsuit penalties could amount to over 800 million pounds, about $1.5 billion USD.

Consumers in the United States could stand to gain up to three times what they paid in fuel surcharges if the lawsuit is successful. Thousands of passengers - anyone who flew between the U.S. and the U.K. over the last few years - could be entitled to financial compensation in the class action lawsuit.

Allegations of Price Fixing could cost Airlines over 1.5 billion dollars

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