BA, Virgin to pay restitution for price-fixing
Andrew Compart, Travel Weekly, 2/15/2008
British Airways and Virgin Atlantic have agreed to reimburse U.S. customers $59 million and U.K. customers about $145 million to settle a class action lawsuit over their conspiracy to fix fuel surcharges.
U.S. customers who took British Airways or Virgin Atlantic long-haul flights into or out of London between Aug. 11, 2004, and March 23, 2006, will be eligible to receive from about $4 to $20 for each one-way flight, depending on the amount of surcharge they paid, according to Virgin Atlantic and Cohen, Milstein, Hausfeld & Toll (the law firm that filed the lawsuit). U.K. customers will get 2 to 10 British pounds per one-way flight.
According to the law firm, which filed its lawsuit in June 2006, more than 8 million tickets were purchased over the eligible time period. U.S. passengers or businesses wishing to receive a refund will be able to visit a Web site to provide their contact information but the site isn't up yet. No claims can be made until the settlement receives final court approval and an independent claims administrator is appointed.
British Airways pleaded guilty last August to price-fixing on cargo rates and passenger fares to settle charges filed by the U.S. Department of Justice, agreeing to pay a $300 million fine. The carrier admitted to fuel surcharge price fixing with Virgin Atlantic on transatlantic service from August 2004 to mid-February 2006. Over that period, the DOJ said, the carriers' surcharges rose from about $10 to about $110 for a typical, long-haul, roundtrip flight.
Virgin Atlantic received conditional amnesty from the DOJ because the airline came forward to report the illegal activity. But one of the DOJ's conditions for that amnesty is that the company must provide restitution to the crime's victims "where possible."
Nonetheless, Virgin Atlantic at the time insisted it didn't owe its customers any restitution because it did not believe it had overcharged any of its passengers. But in a statement on its Web site on Feb. 15, after the settlement had been announced, Virgin Atlantic said it "deeply regrets its involvement in this matter and believes the provisional settlement reached now draws a line under this episode."