BA executives resign amid price-fixing row
The two senior British Airways executives suspended in June in connection with an investigation into price-fixing resigned this morning.
Commercial director, Martin George, and head of communications, Iain Burns, have been on leave of absence since the Office of Fair Trading announced it was carrying out an investigation with the US Department of Justice into the airline's increases in fuel surcharges on transatlantic flights.
Mr George, who was also a member of the BA board, this morning admitted that staff in his department may have been involved in inappropriate discussions with competitors about the fuel surcharge.
„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,“ Mr George said in a letter to the BA chairman, Martin Broughton. „Although the BA board has not found that I have behaved dishonestly, I fully recognise my responsibilities as head of department and as a board director.“
Mr George, 44, joined BA in 1987 as a brand manager. He will receive a £375,000 pay-off, equivalent to one year's salary under the terms of his contract, which has a 12-month notice period. He will be replaced by the director of planning, Robert Boyle.
Thomas Coops, a former communications director at Abbey National, was appointed as an interim replacement for Mr Burns.
It is thought that BA executives sounded out their counterparts at Virgin Atlantic about plans to increase its fuel surcharge, a fee levied on passengers to offset the rising cost of oil.
Virgin tipped off the OFT, triggering the investigation. BA could face a fine of up to £850m, 10% of its annual turnover, while individuals found guilty of breaking the law could face up to five years in prison.
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