LONDON (Reuters) – Two senior British Airways executives have quit after being linked to an investigation into alleged price-fixing of fuel surcharges, Europe’s third-largest airline said on Monday.
BA, which is being investigated by the UK and U.S. authorities for alleged cartel activity, said its commercial director Martin George and head of communications Iain Burns had resigned. Both had been on a leave of absence since the investigation began in June.
The probe was triggered when rival Virgin Atlantic approached the Office of Fair Trading (OFT) about alleged conversations between a BA executive and one of its staff last year over plans to increase fuel surcharges, industry sources have told Reuters.
“I now recognise that within my department, there may have been inappropriate conversations in violation of company policy in relation to long-haul fuel surcharges,” BA quoted George as saying on Monday in a letter to its chairman.
“I was not involved in such conversations. Although the board of BA have not found that I have behaved in a dishonest way, I fully recognise my responsibilities as head of department and as a board director.”
Burns, who reported directly to George, had also resigned, the airline said.
BA shares were trading 1.8 percent weaker at 430-1/2 pence by 10:23 a.m.
George was one of the airline’s top executives who had been considered a potential successor to former Chief Executive Rod Eddington before he was replaced by current boss Willie Walsh.
The OFT, which raided BA in June as part of the investigation conducted jointly with the U.S. Department of Justice, said in June the probe was into an alleged cartel over airfares and surcharges.
American Airlines, United Airlines and Virgin have said they were also involved in the probe but were not direct targets.
BA faces fines of up to 300 million pounds, or 10 percent of turnover on its lucrative trans-atlantic routes if found guilty of price-fixing, analysts said. If the probe involved the airline’s total operations that could increase to 900 million pounds.
Virgin’s tip-off underscores long-time rivalry between the two airlines, which previously peaked in 1993 when Branson accused BA of waging a “dirty tricks” campaign against Virgin. BA first introduced a fuel levy in May 2004, around the same time as Virgin Atlantic.