of the Department of Justice’s investigation, the American lawyers appeared not to have sought evidence to contradict Moore’s version of how the subsequent discussions between Virgin and BA about further increases in the fuel surcharge occurred.
‘This is a conversation we’re not having,’ were the undisputed opening words of the telephone conversation on 6 August 2004 between Moore and Iain Burns. To establish BA as the villain behind the alleged conspiracy, the prosecutors in America and Britain relied on statements signed by Moore alleging that Burns had called him first, thus casting Burns and BA as responsible for initiating the conspiracy. Burns would deny the accusation. His lawyers would say that Virgin’s attempt to incriminate BA was a distortion of the truth.
The two men did, however, agree about the content of the first telephone call: Burns revealed that BA was planning to impose a surcharge of £6, while Moore disclosed Virgin Atlantic’s agreement to impose a £5 surcharge on long-distance flights. Moore’s testimony about the events that followed was critical to the prosecution. He would say that after Burns called him ‘out of the blue’, he went immediately to see Steve Ridgway, who in turn summoned Willy Boulter, Virgin Atlantic’s commercial director. Moore told them, ‘You won’t believe the call I’ve just had from British Airways,’ and then read his recollection of the exchange from his notebook. Virgin’s two executives decided that the airline should agree with BA on the timing of the announcement and match the amount of the surcharge.
The economics of pricing airline tickets is complex. Airlines continuously change their prices without notice. Passengers inany Boeing 777 would be paying about sixty different fares, based on constant recalculations by sophisticated computer programs. A conspiracy between airlines to fix all those prices would be difficult. Fuel surcharges, however, have always been publicly announced. Ridgway knew that Branson was nervous about the mechanics of publicising a surcharge. Some inside Virgin would even say that Branson was ‘obsessed’ by the actual words used in Virgin’s announcement. In particular, he wanted the context of the surcharge – the rising oil prices – to be properly explained.
On 6 August, Branson was satisfied by the statement drafted by Moore, and Moore was told to confirm his agreement about the timing of the announcement with Burns. BA, everyone agreed, would make the first announcement of a £6 increase, and Virgin would follow hours later. This was the conspiracy to which Virgin pleaded guilty, wilfully incriminating BA. There was, however, another version.
Weeks after the £6surcharge was announced, Branson, according to prosecutors, ‘emailed Boulter and suggested that Virgin should consider again increasing its Passenger Fuel Surcharge’. The following day, Boulter discussed a further increase with Alan Burnett, BA’s sales director. Boulter reported his agreement with Burnett to Ridgway, and two months after agreeing the £6 surcharge, BA and Virgin Atlantic simultaneously announced that their respective Passenger Fuel Surcharges would go up to £10.
Over the following months, oil prices continued to rise and Virgin’s finances were squeezed. In March 2005, after intense discussions within BA and by Virgin’s executives, Moore and Burns spoke again. Acting as messengers, they agreed about the timing of their respective announcements that the surcharge would be raised by a further £6, to £16 each way. On 24 June, after more discussions between Boulter and Burnett, both airlines increased their surcharge to £24. In anticipation of the announcement, Moore sent Burns a copy of Virgin’s pressrelease. On the same day, Branson appeared on TV to say that he was opposed to fuel surcharges. No one at BA’s headquarters was surprised by Branson’s inconsistency, but everyone knew that Virgin Atlantic’s finances
‘This is a conversation we’re not having,’ were the undisputed opening words of the telephone conversation on 6 August 2004 between Moore and Iain Burns. To establish BA as the villain behind the alleged conspiracy, the prosecutors in America and Britain relied on statements signed by Moore alleging that Burns had called him first, thus casting Burns and BA as responsible for initiating the conspiracy. Burns would deny the accusation. His lawyers would say that Virgin’s attempt to incriminate BA was a distortion of the truth.
The two men did, however, agree about the content of the first telephone call: Burns revealed that BA was planning to impose a surcharge of £6, while Moore disclosed Virgin Atlantic’s agreement to impose a £5 surcharge on long-distance flights. Moore’s testimony about the events that followed was critical to the prosecution. He would say that after Burns called him ‘out of the blue’, he went immediately to see Steve Ridgway, who in turn summoned Willy Boulter, Virgin Atlantic’s commercial director. Moore told them, ‘You won’t believe the call I’ve just had from British Airways,’ and then read his recollection of the exchange from his notebook. Virgin’s two executives decided that the airline should agree with BA on the timing of the announcement and match the amount of the surcharge.
The economics of pricing airline tickets is complex. Airlines continuously change their prices without notice. Passengers inany Boeing 777 would be paying about sixty different fares, based on constant recalculations by sophisticated computer programs. A conspiracy between airlines to fix all those prices would be difficult. Fuel surcharges, however, have always been publicly announced. Ridgway knew that Branson was nervous about the mechanics of publicising a surcharge. Some inside Virgin would even say that Branson was ‘obsessed’ by the actual words used in Virgin’s announcement. In particular, he wanted the context of the surcharge – the rising oil prices – to be properly explained.
On 6 August, Branson was satisfied by the statement drafted by Moore, and Moore was told to confirm his agreement about the timing of the announcement with Burns. BA, everyone agreed, would make the first announcement of a £6 increase, and Virgin would follow hours later. This was the conspiracy to which Virgin pleaded guilty, wilfully incriminating BA. There was, however, another version.
Weeks after the £6surcharge was announced, Branson, according to prosecutors, ‘emailed Boulter and suggested that Virgin should consider again increasing its Passenger Fuel Surcharge’. The following day, Boulter discussed a further increase with Alan Burnett, BA’s sales director. Boulter reported his agreement with Burnett to Ridgway, and two months after agreeing the £6 surcharge, BA and Virgin Atlantic simultaneously announced that their respective Passenger Fuel Surcharges would go up to £10.
Over the following months, oil prices continued to rise and Virgin’s finances were squeezed. In March 2005, after intense discussions within BA and by Virgin’s executives, Moore and Burns spoke again. Acting as messengers, they agreed about the timing of their respective announcements that the surcharge would be raised by a further £6, to £16 each way. On 24 June, after more discussions between Boulter and Burnett, both airlines increased their surcharge to £24. In anticipation of the announcement, Moore sent Burns a copy of Virgin’s pressrelease. On the same day, Branson appeared on TV to say that he was opposed to fuel surcharges. No one at BA’s headquarters was surprised by Branson’s inconsistency, but everyone knew that Virgin Atlantic’s finances
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