British Airways attacked by flowers
December 9 2010, 3:42 pm
BA wins class action lawsuit against UK flower companies
British Airways recently faced legal action from two UK flower importers allocating that the company was involved in price-fixing cartel. The flower importers believed that their loss in revenue was due to the unmerited price of air cargo imposed by the airline.
After being brought to High Court, the airline has won the lawsuit thus preventing further onset of air cargo customer complaints and class action lawsuits. The lawsuit was supported by more than 200 other companies which claimed they had also suffered loss as a result of the cartel. These claims must now be brought individually to the Court of Appeal.
Cartels are a formal agreement among competing firms to fix prices on similar products such as airline tickets or gas prices. The companies not only agree on the price of the item but the industry output, market shares, and allocation of customers and/or territories. The objective is for companies to increase their profits by eliminating competitors not involved in the cartel.
Class action lawsuits associated with price-fixing cartels are not new to British Airways. In 2007, BA pleaded guilty to being involved in a US cartel scam. The airline was fined $300m for its role in conspiring to fix cargo rates and passenger fares. And, in the beginning of November 2010 the airline was charged with another fine from the European Commission for their involvement in a European air cargo cartel that lasted nearly six years.
The UK flower importers are still planning to press ahead with areas of the claim that were unresolved or left out of the recent ruling. They believe that being independently represented in the Court of Appeals will simplify the process while saving time and money.
