BRITISH Airways has
been fined R21,7m
by the South African
Competition Tribunal on
charges of colluding with
Virgin Atlantic to ‘fix’ the fuel
surcharge on flights between
South Africa and the UK.
According to a consent order,
in 2008 the Competition
Commission initiated an
investigation into the airlines
and found that between
August 2004 and January
2006, BA and Virgin Atlantic
“participated in an agreement
and/or concerted practice by
which they co-ordinated their
pricing in relation to their
respective fuel surcharge rates
to passengers travelling on
the United Kingdom to South
Africa routes and vice versa,
through the exchange of
pricing and other commercially
sensitive information”
in contravention of the
Competition Act.
In 2012 the Commission
referred the matter to the
Competition Tribunal for
adjudication, which saw the
airline enter into settlement
negotiation with the
Commission. BA admitted to
colluding with Virgin Atlantic
to fix the fuel surcharges on
the flights during the period.
It also agreed to refrain from
participating in this type of
conduct in future and initiated
a compliance programme
designed to ensure that
the relevant employees and
directors were informed of and
complied with their obligations
under competition law and the
provisions of the Competition
Act.
These terms were over and
above the R21 765 297
“administrative penalty” the
airline agreed to pay. According
to the consent order, this
amount does not exceed 10%
of BA’s annual turnover into or
from SA in its 2011 financial
year.
Spokesperson for BA,
Stephen Forbes, told TNW:
“We are pleased that this
matter, which concerned
unauthorised unlawful conduct
taking place more than eight
years ago, is settled.”
Virgin Atlantic’s press
office said it was aware of
the hearing between BA and
the South African authorities
but suggested any further
questions surrounding Virgin’s
involvement be directed to the
Commission.
Nazeera Mia, an associate in
competition practice at Cliffe
Dekker Hofmeyr, BA reached a
similar settlement agreement
with the Commission in 2012.
The complaint then was linked
to British Airways World Cargo
for exchanging commercially
sensitive information with
other air cargo carriers. “The
exchange of information
resulted in fixing the fuel
surcharges in the international
market for air freight and/or
cargo services. This conduct
attracted an administrative
penalty of £871 116.50
(R15,5m),” she said.
