Deon P. Green, Sunday Gleaner Writer

British Airways airliner.

London, England:

While Air Jamaica contemplates scaling down its London to Kingston route due to competition, British Airways, which also serves Jamaica, has been embroiled in a price-fixing controversy. As a result, British Airways now faces massive penalty and compensation charges to its passengers and international regulators.

Yesterday, officials of British Airways admitted breaking competition rules and setting aside 350 million to pay for the consequences.

Reports reaching The Sunday Gleaner are that British Airways, Europe's third largest carrier, is under investigation by the United States Justice Department, the European Commission and the United Kingdom Office of Fair Trading over alleged price fixing of fuel surcharges for long-haul and cargo flights.

Chief executive of BA, Willie Walsh, has expressed regret over the major embarrassment. He reportedly stated, "The policies which we have in place at BA, which are designed to ensure we don't breach competition law, have been broken.

Deeply regrettable

"That is deeply regrettable. We have a stringent regime. It is well documented that we train all our people and it is completely unacceptable that the policy was breached."

With 350 million set aside to deal with compensations, the ailing airline, which has been hit by disruption from terror scare and heavy fog at London Heathrow airport in recent times along with other issues, could be bracing itself for another blow. The airline could face overall fines mounting to almost 900m as the regulators could impose charges of 10 per cent on the airlines' annual turnover for anti-competitive behaviour. Up to Friday the airline reported annual pre-tax profits of 611 million.

Under the investigation it is alleged that BA had collaborated with other carrier in the price fixing fiasco. It further alleged that BA contacted Virgin Atlantic about plans to increase the surcharges. However, BA does not intend to eliminate the additional fees of fuel surcharges imposed on passengers to cover the increasing cost of fuel. Last year BA earned 519 million from the charges.

BA and Virgin Atlantic introduced fuel surcharges in May 2004 against the rising price of oil on the international market. BA now charges 66 for long-haul return flights of less than nine hours, while Virgin charges 68.