Virgin tip-off 'led to BA probe'

Regulators are investigating BA over pricing practices

A tip-off from rival Virgin Atlantic led US and UK competition authorities to investigate alleged price-fixing attempts by British Airways.

It is suggested that last year, a BA executive told a Virgin counterpart of plans to increase BA's fuel surcharge, says BBC business editor Robert Peston.

Under competition law, tipping off a rival about a price change is illegal.

BA said its policy was to conduct its business "in full compliance with all applicable competition laws".

Virgin informed the UK's Office of Fair Trading, which is working with the US Department of Justice on the investigation.

1992's 'dirty tricks'

The transatlantic inquiry will look into whether BA had been informing other airlines of its fuel surcharge plans.

The OFT raided BA's offices on 13 June, and the US Justice Department has contacted American Airlines, which is a member of BA's One World alliance of airlines.

American Airlines said yesterday that it had "received a United States federal grand jury subpoena in connection with a government investigation into alleged price fixing in the air passenger industry".

It pointed out that it was not a target of the investigation.

BA has told two senior executives to remain at home during the inquiry.

They are Martin George, BA's commercial director and number two to chief executive Willie Walsh, and Iain Burns, the director of communications.

Our business editor says the disclosure that Virgin Atlantic is the whistleblower will revive memories of the "dirty tricks" libel case brought by its founder Richard Branson against BA in 1992.

Mr Branson won the case and substantial damages.

Despite the concerns surrounding the allegations, the OFT said that it was too early to assume that any competition laws had been broken.