Virgin Atlantic “blew the whistle” over its price-fixing cartel with British Airways as it became so scared of the financial consequences if US regulators found out, a court was told.
The fines would have run into millions so Virgin confessed to its cartel with in order to gain immunity from prosecution, it was alleged.
Four senior British Airways execs are charged with colluding with other airlines to fix fuel surcharge prices.
Clare Montgomery, QC, defending former BA commercial director Martin George, told a jury at Southwark Crown Court that although the two airlines had been in discussions about pricing that could have been legitimate, Virgin was not prepared to take that risk.
Instead it sparked a series of events that led to four BA senior executives being prosecuted over allege price fixing.
“It’s a race,” of the rush to inform the authorities four years ago.
She said: “If you don’t get to them and confess first, you can’t get immunity.”
“The only way to protect yourself is to go to the authorities, even if you haven’t [done anything].”
The result, she said, was that Virgin and its staff were given immunity in the United States which led to a similar deal in Britain, leaving the BA staff exposed to prosecution for price-fixing, which carries a maximum jail term of five years.
She explained that as part of the immunity deal three Virgin executives had agreed to testify against their BA counterparts.
Ms Montgomery also encouraged the jury to “keep an open mind” when the three, including the Virgin chief executive Stephen Ridgway, testified next week.
She also alleged that Virgin founder and president, Richard Branson, had been involved in that process. In 2005, he telephoned a journalist at the Sunday Express, telling him that BA were considering raising fuel surcharges. The journalist then called Iain Burns at BA who revealed further details, which subsequently were published in the newspaper.
The prosecution has alleged that Burns gave the same pricing information to Virgin as part of a criminal conspiracy. But Ms Montgomery said: “The reason why Mr Burns was willing to give information [to Virgin] was that he had already given it to the Sunday Express.”
The case continues.