Virgin Atlantic chief admits to awareness of price fixing

Virgin Atlantic chief admits to awareness of price fixing

Steve Ridgway, the chief executive of Virgin Atlantic, has admitted to being aware that his airline had conspired to fix prices with British Airways. He was named in court in connection with one current and three former BA executives, who yesterday pleaded not guilty to fixing the price of fuel surcharges on passenger flights. The alleged offence occurred between July 2004 and April 2006.

In a statement released by the airline, he said: “I apologise unreservedly for my involvement in this case. I have fully co-operated with the competition authorities since their inquiries began in 2006.

“Although I did not have any direct contact with BA in relation to passenger fuel surcharges I regret that, on becoming aware of the discussions, I did not take steps to stop them.”
Virgin blew the whistle on the alleged offence in 2006 in a move that gained Richard Branson’s carrier immunity from prosecution, but landed its main UK rival with a £121.5m fine from the Office of Fair Trading and a further $100m (£62m) penalty from the US Department of Justice.

But the news that Virgin Atlantic’s chief executive was aware of the alleged cartel raises serious doubt’s over Ridgway’s judgment and future. Instead of firing him, the airline decided to keep him on and use the situation to avoid prosecution and leave its arch rivals facing charges.

Asked if Virgin had considered firing him, a spokesman said: “Not at all. The board discussed all this in 2006 and they fully supported him and the business has moved on.” Neither did he offer to resign.

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The OFT has taken action against the four individuals, who were in court yesterday for a preliminary hearing.

The four are Martin George, the former BA operations director who was a member of the main board; Iain Burns, the former communications director; Alan Burnett, the former head of UK sales, and Andrew Crawley, the current sales and marketing director. All pleaded not guilty to the charges.

The indictment released yesterday said that the BA executives had “dishonestly agreed” with the Virgin executives to implement an agreement that “directly or indirectly fixed the price for the supply by British Airways and Virgin Atlantic Airways in the UK of passenger air transport services”. The trial is scheduled for January. Stephen Murphy, chairman of Virgin Atlantic, said yesterday: “I know that Steve understands the seriousness of the matter and I fully support the comprehensive measures he has taken within Virgin Atlantic to prevent any future infringements of competition law.”