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BA Admits Price Fixing - Braces For Fines  
User currently offlineUAL777UK From United Kingdom, joined Nov 2005, 3356 posts, RR: 1
Posted (7 years 7 months 1 week 5 days 10 hours ago) and read 2681 times:

They seem to acknowledge that the fine is going to be very hefty to say the least!!

http://yahoo.reuters.com/news/articl...19_L18735065&type=comktNews&rpc=44

11 replies: All unread, jump to last
 
User currently offlineScotron11 From United Kingdom, joined Feb 2004, 1178 posts, RR: 3
Reply 1, posted (7 years 7 months 1 week 5 days 4 hours ago) and read 2496 times:

We haven't heard the full story yet. Although both Martin George and Iain Burns resigned last year, BA's board found that George did not behave in a "dishonest" way.

So who was they guilty party?? Burns??

I'd hate to be the guy that cost my company untold millions!!


User currently offlineGeo772 From United Kingdom, joined Jul 2004, 519 posts, RR: 0
Reply 2, posted (7 years 7 months 1 week 5 days 4 hours ago) and read 2469 times:

They have admitted that one or possibly more members of staff behaved in this anti competitive fashion.

However, this does not actually mean that prices were changed as a result. All very complicated, but BA is preparing for the worst case scenario here.



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User currently offlineWorldTraveler From , joined Dec 1969, posts, RR:
Reply 3, posted (7 years 7 months 1 week 5 days 4 hours ago) and read 2469 times:

precisely why LHR needs to be genuinely opened to competition. you can't pull this stuff off in highly competitive markets.

User currently offlineRtfm From United Kingdom, joined Oct 2004, 442 posts, RR: 0
Reply 4, posted (7 years 7 months 1 week 5 days 3 hours ago) and read 2369 times:

Quoting WorldTraveler (Reply 3):
precisely why LHR needs to be genuinely opened to competition. you can't pull this stuff off in highly competitive markets.

Sorry but the issues of LHR access and this instance of alleged anti-competitive behaviour are completely unrelated. Airline fuel surcharges apply on all routes. Any many routes out of LHR are highly competative. This first surfaced as an issue of cargo fuel surcharges and there were other airlines under investigation.

And the title of this thread is misleading. BA has not admitted price-fixing. They have said that there have been breaches of internal policy on anti-competitive bahaviour but that is not quite the same thing. The BBC report quotes its Business Editor Robert Peston who said that he "wouldn't be at all surprised if no fuel surcharges were actually fixed in a way that damaged customers".


User currently offlineBongodog1964 From United Kingdom, joined Oct 2006, 3687 posts, RR: 4
Reply 5, posted (7 years 7 months 1 week 5 days 3 hours ago) and read 2340 times:

Quoting Rtfm (Reply 4):
And the title of this thread is misleading. BA has not admitted price-fixing. They have said that there have been breaches of internal policy on anti-competitive bahaviour but that is not quite the same thing. The BBC report quotes its Business Editor Robert Peston who said that he "wouldn't be at all surprised if no fuel surcharges were actually fixed in a way that damaged customers".

Willie Walsh was interviewed on the BBC this morning, and when pressed on the subject of price fixing, he certainly didn't admit to it Thus I fully agree with the statement above.

Overall it is impossible for one party to collude and fix prices; it requires at a minimum two parties and normally all parties offering a similar service. Thus if BA are guilty so is someone else.

I recall that VS were the party approached by BA in this regard, is their reporting the matter to the authorities sufficient to absolve them of all financial liability if price fixing is proven ? Surely if VS didn't collude over prices, but merely noted the conversation and reported the matter, BA aren't guilty of the major charge of price fixing either, only of seeking information with some form of intent.

Hopefully for BA shareholders this is merely a prudent provision.

Of course many lawyers will be looking to launch class actions over this, but even if proven the surcharges never reached more than £40 or so. Thus any compensation to passengers would be swallowed up in lawyers fees.


User currently offlineRevelation From United States of America, joined Feb 2005, 12970 posts, RR: 25
Reply 6, posted (7 years 7 months 1 week 5 days 3 hours ago) and read 2295 times:

Quoting Rtfm (Reply 4):
And the title of this thread is misleading.

The title is the same as the linked article.

Quoting Rtfm (Reply 4):
BA has not admitted price-fixing. They have said that there have been breaches of internal policy on anti-competitive bahaviour but that is not quite the same thing.

The article says:

Quote:
BA said staff had broken its policy of observing competitions laws. "There have been breaches of this policy -- As a result it is now appropriate for the company to make a provision of 350 million pounds," it added.

Slice and dice it as you please, but the way I read it, suppose BA said its staff had broken its policy of observing murder laws, I'd conclude a member of their staff had committed murder.



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User currently offlineUAL777UK From United Kingdom, joined Nov 2005, 3356 posts, RR: 1
Reply 7, posted (7 years 7 months 1 week 5 days 2 hours ago) and read 2204 times:

Quoting Revelation (Reply 6):
The title is the same as the linked article.

Thankyou....I started the thread as reported!


User currently offlineVV701 From United Kingdom, joined Aug 2005, 7740 posts, RR: 17
Reply 8, posted (7 years 7 months 1 week 5 days ago) and read 2128 times:

Quoting Bongodog1964 (Reply 5):
Willie Walsh was interviewed on the BBC this morning, and when pressed on the subject of price fixing, he certainly didn't admit to it

The words used by Willie Walsh in the interview were:

'It is clear that there have been breaches of our comprehensive, very comprehensive, competition compliance rules. I find that deeply regretable and completely unacceptable. So we are making a provision in our accounts.'


User currently offlineWorldTraveler From , joined Dec 1969, posts, RR:
Reply 9, posted (7 years 7 months 1 week 5 days ago) and read 2066 times:

Quoting Rtfm (Reply 4):
Airline fuel surcharges apply on all routes.

but when a company asks another company to agree to raise prices, you have collusion. the issue is not whether fuel surcharges exist but that BA apparently engaged in illegal behavior to raise those surcharges.

when you have multiple competitors, it is much harder to collude.

Quoting Bongodog1964 (Reply 5):
Quoting Rtfm (Reply 4):
And the title of this thread is misleading. BA has not admitted price-fixing. They have said that there have been breaches of internal policy on anti-competitive bahaviour but that is not quite the same thing. The BBC report quotes its Business Editor Robert Peston who said that he "wouldn't be at all surprised if no fuel surcharges were actually fixed in a way that damaged customers".

Willie Walsh was interviewed on the BBC this morning, and when pressed on the subject of price fixing, he certainly didn't admit to it Thus I fully agree with the statement above.

Overall it is impossible for one party to collude and fix prices;


User currently offlineBongodog1964 From United Kingdom, joined Oct 2006, 3687 posts, RR: 4
Reply 10, posted (7 years 7 months 1 week 4 days 22 hours ago) and read 1986 times:

Quoting VV701 (Reply 8):
Quoting Bongodog1964 (Reply 5):
Willie Walsh was interviewed on the BBC this morning, and when pressed on the subject of price fixing, he certainly didn't admit to it

The words used by Willie Walsh in the interview were:

'It is clear that there have been breaches of our comprehensive, very comprehensive, competition compliance rules. I find that deeply regretable and completely unacceptable. So we are making a provision in our accounts.'

Its good that you have his quote verbatim, I was just taking it from memory. He was very careful to only admit to a breach of Ba's compliance rules. The reporters question to which this was the answer was on the lines of "so you admit to fixing prices?"


User currently offlineRTFM From United Kingdom, joined Oct 2004, 442 posts, RR: 0
Reply 11, posted (7 years 7 months 1 week 2 hours ago) and read 1733 times:

Quoting Revelation (Reply 6):
Slice and dice it as you please, but the way I read it, suppose BA said its staff had broken its policy of observing murder laws, I'd conclude a member of their staff had committed murder.

That's a poor analogy. If (as seems the case here) someone from BA was talking to someone from VS and said something like 'were going to raise our fuel surcharge' then that in itself is not price fixing. But it would be in contravention of competition laws because you can't discuss pricing with a competitor at all. (And would also therefore be in contravention of BA's policy based on competition law which is what WW was alluding to.)

It would only be price fixing if the other party agreed to co-ordinate their pricing which is why I suggested that the title of the thread was misleading (tho' I accept it was referenced from the source document).


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