Cathay Pacific and Virgin Atlantic have today (April 22) been accused by the Office of Fair Trading (OFT) of breaking competition law on the London-Hong Kong route.
It is alleged that the two airlines were in contact over "a number of years", exchanging commercially sensitive information so they could coordinate pricing strategies.
The OFT said that Cathay Pacific had brought the matter to its attention, in return for "immunity from penalties". Under the OFT's leniency policy, a company which is first to report its participation in cartel conduct may qualify.
Virgin Atlantic benefited from the same law in a previous case, when the airline reported price fixing between itself and British Airways.
Ali Nikpay, the OFT's senior director of cartels and criminal enforcement said: 'For a market economy to work effectively it is vital that competing companies determine their pricing strategies independently of each other and do not seek to avoid the rigours of competition through unlawful coordination.
"The parties will now have an opportunity to respond to our proposed findings before we decide whether competition law has in fact been infringed."
A Virgin spokesperson said the airline intends to "robustly defend itself, adding that the allegations are historical, dating from between 2002 and 2006.
"The airline does not believe that it has acted in any way contrary to the interests of consumers. It is important to note that no definitive findings have been made against Virgin Atlantic by the OFT at this time. No decision on any potential infringement has or will be made by the OFT until Virgin Atlantic has an opportunity to formally respond to these allegations," said Virgin.
Cathay Pacific is unable to comment on this issue at this stage. Cathay Pacific has a policy of full compliance on competition law issues and will fully co-operate with any authorities if required to.
www.cathaypacific.com www.virgin-atlantic.com www.oft.gov.uk