Virgin in price fixing inquiry

SIR Richard Branson’s Virgin Atlantic has said it will “robustly defend” itself against accusations of price fixing by the Office of Fair Trading (OFT).

The competition watchdog alleges, Virgin Atlantic and Cathay Pacific may have illegally co-ordinated prices for passenger flights between London and Hong Kong. The body said it had issued a statement of objection alleging that the two had infringed competition law, after Cathay Pacific brought the matter to its attention.

The OFT said that employees of the two airlines had swapped information between 2002 and 2006 in order to co-ordinate ticket prices on the route.

Under the OFT’s leniency policy, Cathay Pacific will be immune from any penalty imposed in the case, since it was the first to report its participation in cartel conduct.

“The parties will how have an opportunity to respond to our proposed findings before we decide whether competition law has in fact been infringed,” said Ali Nikpay, the OFT’s senior director of Cartels and Criminal Enforcement.

Cathay Pacific Airways is Hong Kong’s dominant air carrier. Virgin Atlantic is part of billionaire Richard Branson’s Virgin Group, and is a rival of British Airways.

The case is likely to prove damaging for Branson, who prides himself on being the consumer’s friend.

A Virgin Atlantic spokeswoman said that the airline “does not believe that it has acted in any way contrary to the interests of consumers”.

She added: “It is important to note that no definitive findings have been made against Virgin Atlantic by the OFT at this time.”