BA named worst airline in Europe as millions of bags go missing

British Airways is officially Europe's worst performing major airline,
with passengers more likely to be delayed or lose their bags with BA
than any other company according to a new report.

The figures pile on the misery for BA after it was fined a record
£270million for price-fixing yesterday.

New figures from the Association of European Airlines (AEA) shows more
travellers than ever are losing their bags, with up to 10 passengers
on every flight arriving at their holiday destination without their
luggage.

BA alone, is forecast to lose a record 1.3 MILLION bags this year.

[Mostly to raise fund at the unclaimed auction at Gatwick]

And holidaymakers can expect more misery, with the baggage crisis at
Heathrow expected to exacerbate the problem further during the summer
holiday period.

It's emerged on Tuesday travellers were advised not to check in their
bags and to carry them as hand-luggage instead.

The report also found between April and June, 35.7 per cent of BA
short or medium haul flights did not arrive on time and 32.7 per cent
were delayed on departure.

The airline's performance on long haul flights was even worse with 44
per cent of these arriving late and 36.6 per cent departing later than
scheduled.

For every 1000 passengers travelling in the three months between April
and June, AEA found that an average of 28 bags were delayed on BA
flights compared with around three bags for every 1000 Air Malta
travellers.

The report comes as British Airways was fined a record £270million
yesterday for a price-fixing cartel it set up with Virgin Atlantic.

But Sir Richard Branson's airline escaped punishment as a reward for
blowing the whistle on the deal.

It appeared last night to have been another act of revenge by Virgin
over BA in a feud that has gone on for more than a decade.

Following inquiries over the past year by watchdogs in Britain and the
U.S., British Airways admitted illegally colluding with Virgin in a
secret deal to agree the level of fuel surcharges imposed on
passengers on long-haul flights.

During a 12-month period to 2006, the surcharge on a flight rose from
£6 to £30.

Yesterday the Office of Fair Trading handed down a record
£121.5million fine. Later, the Department of Justice, its counterpart
in the U.S., said it would fine BA £150million.

Investigators described the actions as one of the largest and most far-
reaching conspiracies they had ever looked into.

Lawyers acting for passengers said they would be seeking hundreds of
millions of pounds in compensation from the two airlines which had
behaved 'like robbers'.

Dr Patrick Hanlon, from Birmingham University's business school, said:
'This is Virgin's revenge for BA's past ''dirty tricks'' campaign.'

The two airlines have been at loggerheads since BA sought to scupper
Sir Richard's fledgling Virgin Atlantic airline 16 years ago.

In the latest twist, Virgin was given immunity from fines and criminal
investigations both in the UK and the U.S. after it went to watchdogs
and admitted its part in the affair.

Last night, critics said Virgin was mired as deeply in the corrupt
practice as BA, but had escaped censure by blowing the whistle first -
leaving BA to carry the can and its executives to face up to five
years in prison and an unlimited fine.

BA boss Willie Walsh, who was chief executive designate during part of
the price-fixing period, insisted that despite the breach of anti-
competition law, passengers 'were not overcharged.' The OFT said this
was 'disingenuous'. The mere setting up of an illegal cartel implied
that passengers would be 'ripped off.'

An OFT spokesman said of BA's stance: 'Cartels are illegal because
they prevent competition. If you are fixing prices, customers don't
get the cheapest price and they are being ripped off.'

Simon Williams, Director of Cartel Investigations at the OFT, said
research shows that cartels inflate prices by between ten per cent and
30 per cent.

The price-fixing deal affected about 18 million BA and six million
Virgin Atlantic long-haul passengers over an 18-month period. Virgin
is also set to face compensation claims from angry passengers .

But they argue that, while guilty of collusion, the fuel charges would
have been imposed anyway.

BA was fined by the OFT for price-fixing which saw both companies'
fuel surcharges rise five times in tandem - from £6 to £30 - in the
year to September 2005. Collusion continued up to January 2006

The OFT found that on at least six occasions BA and Virgin Atlantic
discussed plans to raise

fuel surcharges, which are added on to ticket price. The U.S. fine
comprised £50million for the fuelsurcharge arrangement and £100
million for a separate cargo pricefixing scam.

The Justice Department's investigation revealed how BA offices were
raided the day 'the FBI came knocking on the door' with warrants. It
said U.S. passengers suffered 1,000 per cent rise in ticket price from
$10 to $110 .

Two BA executives - former commercial director Martin George who was
at one stage a contender for the top BA job, and communications chief
Iain Burns, have already left the company after admitting their role
in the scandal.

The pair took leave of absence when the investigation was announced in
June 2006, resigning in October 2006. Mr Burns now heads up media for
Abu Dhabibased airline Ethiad.

But they are understood to be at the centre of a criminal
investigation by the OFT and the U.S. Department of Justice into the
conduct of individuals at BA and Virgin.

If found guilty, they could face a maximum five years in prison and an
unlimited fine.

BA admitted it is facing actions from passengers that are already into
double figures, but insisted: 'We will defend ourselves against these
claims because we do not believe any loss was suffered.'

Virgin Atlantic said: 'We are sorry for the breach of competition
rules. But passengers have not lost out. We believe no consumers have
been overcharged.'

CONSPIRACY TO COLLUDE:

How and when British Airways and Virgin 'fixed' their prices.

May 2004: British Airways and Virgin Atlantic introduce long-haul
passenger fuel surcharges of £2.50 per flight.. This is NOT (repeat
NOT) alleged to be the subject of 'collusive contacts.'

FIRST INCREASE Friday August 6 2004: BA and Virgin exchange
information about putting up passenger fuel surcharge. Monday August
9: BA and Virgin announce increase in fuel surcharge to £6 (from Aug
11).

SECOND INCREASE October 2004: 'Unsuccessful attempt by Virgin to
contact BA regarding the increase. October 8 2004: BA increases fuel
duty to £10. Virgin does the same on the same day.

THIRD INCREASE March 21 2005: In two sets of calls BA and Virgin
exchange information about proposed fuel surcharge increases. BA tells
Virgin it intends to increase it to £16. Virgin confirms to BA the
timing and amount of the increase it is going to announce.

Later that day: Virgin announces an increase in fuel duty to £16 (with
effect from March 24). March 22: BA announces increase to £16 (with
effect from March 28).

FOURTH INCREASE Thursday June 23 2005: BA tells Virgin it will
announce next day an increase to £24. Friday June 24: BA announces an
increase to £24 (with effect from June 27) Later the same day Virgin
announces identical increase to £24 Virgin sends BA an e-mail shortly
before its (Virgin's) announcement. BA replies early next morning.

FIFTH INCREASE September 5, 2005 Virgin tells BA in a telephone call
that it is 'on this occasion' to be 'first' to announce an increase
'specifically to £30.' September 6, 2005: Virgin announces increase to
£30 (with effect from September 7) September 8: BA announces increase
in passenger fuel surcharge to £30

VIRGIN REDUCTION November 18, 2005: Virgin tells BA it is about to
announce a reduction in fuel duty to £25. Shortly afterwards Virgin
announces its reduction to £25 After the announcement Virgin again
contacts BA.

VIRGIN INCREASE January 6, 2006: Virgin tells BA it intends to
increase its fuel surcharge to £30> Later the same day it raises the
surcharge to £30 'as it had forewarned.' BA did not adjust its own
level of surcharge in response.

date: Thu, 02 Aug 2007 13:36:11 -0700 author: SB