Virgin Atlantic under investigation for price-fixing

LONDON - Virgin Atlantic has been hit by allegations by the Office of Fair Trading that it colluded with Cathay Pacific to fix airfares.

Virgin Atlantic: subject of new OFT probe
Virgin Atlantic: subject of new OFT probe

The OFT has issued a statement of objections, alleging that Virgin and Cathay Pacific have infringed competition law in relation to passenger services on the London to Hong Kong route.

Cathay Pacific went to the OFT to report its participation and will accordingly be immune from any penalty imposed, as long as it continues to co-operate.

According to the OFT, which said it should not be assumed "at this stage" that the companies have broken the law, the case concerns a number of alleged contacts between employees of the two airlines between September 2002 and July 2006.

In response to the allegations, Virgin said it intended to "robustly defend itself".

In a statement, the company said: "The airline does not believe that it has acted in any way contrary to the interests of consumers. It is important to note that no definitive findings have been made against Virgin Atlantic by the OFT at this time.

"No decision on any potential infringement has or will be made by the OFT, until Virgin Atlantic has an opportunity to formally respond to these allegations."

Virgin Atlantic is also involved in a separate price-fixing case, which the OFT is currently pursuing in Southwark Crown Court against four current and former British Airways executives.

Virgin was the whistleblower in the case, which involves alleged collusion between it and British Airways between 2004 and 2006, to fix the price of fuel surcharges.

Former British Airways commercial director Martin George, sales and marketing director Andrew Crawley, ex-head of communications Iain Burns, and former head of UK and Ireland sales Alan Burnett deny any wrong doing.

The charges have been brought by the Office of Fair Trading (OFT) under Section 188 of the Enterprise Act.

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