Ba Fined Over Fuel Surcharge

[Albert Tatlock]

From the BBC: BA's price-fix fine reaches £270m. "British Airways has been fined about £270m after it admitted collusion in fixing the prices of fuel surcharges."

 

Out of curiosity - anyone know how these companies calculate their 'fuel surcharges', and/or, is the IOM OFT/Tynwald investigating/investigated/keeping a watching brief/ignoring any such 'fuel surcharges' on the island?

[manxman8180]

But surely fining a firm for basically over-pricing, means they will have to raise prices? They only have one major revenue stream, being their passengers.

 

I'm not sure it really works.

[spermann]

But surely fining a firm for basically over-pricing, means they will have to raise prices? They only have one major revenue stream, being their passengers.

 

I'm not sure it really works.

 

yes i agree the management should be birched instead!

[Mission]

I had the exact same thought when I heard the story on the news today. Maybe the government should simply set the surcharge and bill it to the airlines rather than have them implement thier own surcharges?

[Pragmatopian]

BA is at liberty to charge whatever it wants for it's services - it's operating in an open market. The issue here was not that a surcharge was levied - it was that BA colluded with other airlines (specifically Virgin Atlantic) to set the surcharge. This was deemed to be anti-competitive.

 

A price itself maybe deemed to constitute an abuse of a dominant market position where there is no effective competition. This is more likely to apply to the Isle of Man. I suppose it could apply to the likes of BA on routes where there are no competing services and it charges exorbidant prices - in that case, the market would be for 'air travel between x and y' and BA would be in a dominant market position.

[jim]

Were does the money go? It should go back to those that were over charged.

[Cambon]

Were does the money go? It should go back to those that were over charged.

 

It goes to the Federation of Air Related Transport or F.A.R.T. for short!

[tucker]

British Justice at its best

Two blokes rob a bank

Bloke A rats on bloke B

Bloke B has to pay back the money and goes to prison

Bloke A gets praised and keeps the money he stole.

[Albert Tatlock]

Were does the money go? It should go back to those that were over charged.

 

It goes to the Federation of Air Related Transport or F.A.R.T. for short!

I believe the UK OFT fine goes to Gordon Broon and his government. The fine is for colluding, it doesn't mean that the surcharges were wrong, though if people believe they were wrong, they are going to have to pay lawyers to try and prove so and to get their money back.

 

Poor old Joe Public BA air traveller gets shafted either way - either he has paid the fine for the company (effectively a stealth tax), he has paid any excessive surcharges (should they be proven to be excessive surcharges) as well as any compensation to large companies that will sue BA if the charges are deemed to have been excessive. Joe Public will no doubt have to pay again in the future to help BA recover the fine for the shareholders and any resulting compensation claims (surcharges + lawyer fees).

 

IMO, the OFT should have also investigated whether the surcharges were unfair, and if they were unfair, ordered BA to plain and simply pay back money directly to those customers involved and fine them excessively, or if they were fair, fined the company a non excessive amount. The investigators surely must have had access to all of the data to be able to decide this.

 

Whichever way you look at it, air travellers have effectively chucked money into the treasury. The only winners here are Gordon Broon and his cronies who are laughing all the way to the bank with an extra £121M to waste on their nu-shite-chav reproduction policies, and of course Virgin.