LAGOS, Nigeria (AP) — A panel in Nigeria has set aside a $235 million fine levied against British Airways and Virgin Atlantic by the nation's government over allegedly fraudulent fuel surcharges on tickets, an official said Friday.
The panel of experts issued a ruling that the Nigerian Civil Aviation Authority lacked the regulatory power from 2004 to 2006 to fine the airlines, the period authorities alleged the price fixing took place, said Harold Demuren, the agency's top official.
Instead, all aviation officials could have done during that period was issue a cease-and-desist order to carriers who inflated fares, Demuren said. The agency later received regulatory power to issue fines, he said.
There was no immediate decision on whether the agency would pursue other means to fine or punish the airlines for the alleged price fixing for tickets from Lagos' Murtala Muhammed International Airport to London's Heathrow Airport.
"The government is discussing it," Demuren said Friday.
Both British Airways, which is run by International Consolidated Airlines Group PLC, and Virgin Atlantic Airways Ltd. denied inflating prices when the government announced the fines in November. Both companies issued statements Friday saying they welcomed the panel's Thursday decision and planned to continue flying to the oil-rich nation.
Travelers routinely complain about high fares in Nigeria, Africa's most populous nation of more than 160 million people. A six-month investigation by the Nigerian government alleged that fuel charges spiked in just over a year, from 2.50 pounds ($4) in 2004 to 30 pounds ($47) in 2005. The charges remained in place despite the costs of jet fuel dropping, the government claimed.
The two airlines control about 90 percent of all passenger traffic to and from the United Kingdom.
The Nigerian government's push to accuse the two airlines of price fixing has precedent abroad. In the U.S., 21 airlines have paid more than $1.7 billion in fines over artificially inflating passenger and cargo fuel charges, one of the largest criminal antitrust investigations in U.S. history. Both British Airways and Virgin Atlantic found themselves ensnared in that probe, with British Airways fined $300 million in August 2007. Virgin Atlantic escaped fines by coming forward to prosecutors with details of the price fixing.
Losing flights to Nigeria would have come at a great cost to foreign carriers, who see their flights often filled with expatriates working in the country's oil industry, business executives and others. Lagos' international airport, a major hub for West Africa, saw 2.3 million passengers pass through it in 2009, according to the most recent statistics provided by the Federal Airports Authority of Nigeria.
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Jon Gambrell can be reached at www.twitter.com/jongambrellAP.
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