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NCAA Investigation of British Airways and Virgin Atlantic Airways

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As background, British Airways (BA and Virgin Atlantic Airways (VAA) between 2004 and 2006 colluded to fix, periodically increase and maintain a Passenger Fuel Surcharge (PFS) as a component of fares.  This conduct was against the law.  It was investigated and penalized by the competition authorities in the U.S and U.K which extended to criminal and civil fines against BA in excess of $500 Million.  VAA did not pay a fine because it entered into leniency and immunity programs in both jurisdiction for actually being the first to come in, admit its conduct, make full disclosure and cooperate with the authorities.In addition to government action, there were several class action law suits filed in the U.S by consumers.  The cases were consolidated and settled by both airlines for approximately $200 Million.  The settlement only covered tickets purchased in the U.S. And U.K even if travel was to, or from Nigeria.The NCAA pursuant to Section 7(2)(j) of the Nigerian Civil Aviation Act, No 49 of 1999 (then in force between 2004 and 2006) and Section 30(4)(i) of the 2006 Civil Aviation Act, (currently in force) opened an investigation.  The investigation lead to a Report which is available for download below this article.  The Report made specific findings that the BA and VAA colluded and violated Nigerian law.  In addition, that the manner both airlines devised and implemented the PFS was deceptive and unfair and that their pricing for Nigerian routes were discriminatory.  As penalty, the NCAA fined BA $135 Million and VAA, $100 Million.

Both being dissatisfied administratively appealed the decision under NCAA Regulations.  The DG constituted an Administrative Appeals Panel to hear the appeal.  The Panel erroneously and unfortunately did not agree that NCAA had sufficient power to impose the fines.  We strongly disagree and believe the law and extant regulations make that power abundantly clear.  However, the Panel validated all the factual findings that the conduct of BA and VAA were collusive, deceptive and exploitative of both consumers and the Federal Government in denying it of statutory tax revenue in how it created and maintained the PFS.

A synopsis of the specific language used by each panel member to describe the conduct is also available.

The list of documents:

  1. The Investigative Report by the NCAA
  2. Executive Summary of the Report
  3. Lead Decision of the Panel in BA case and same for VAA
  4. Respective Panel member decisions in BA and VAA cases which cases are different but similar both in facts and decisions.
  5. Synopsis of the Panel decision including excerpts from the decisions
Documents
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