News

By Emily Williamson

BRITISH Airways could take its battle against a £4.8 million court fine for abusing its dominant market position to the European Court.

It comes as the carrier dismisses reports of plans to axe 5,000 jobs as "pure speculation".

BA was forced to tear up its contracts with agents in 1999 after the European Commission ruled the deals were illegal. The EC said BA’s moves to offer travel agents extra commission payments in return for them meeting or exceeding their previous year's sales of BA tickets, amounted to a "loyalty discount".

It said this would discourage the agent from selling tickets for other airlines to customers. The complaint against the practice originated from Virgin Atlantic.

BA appealed, but the Court of the First Instance has upheld the decision and the fine.

BA paid the fine and changed its incentive arrangements at the time.

A spokeswoman said: "We will study the judgement and consider over the next few weeks whether to appeal to the European Court."

Virgin Atlantic said the fine “completely vindicates our position”, claiming this will set a legal precedent.

Meanwhile, a letter from BA chief executive Rod Eddington to staff which said the 2004 business plan will be published early in the New Year rather than the usual time of March has sparked job loss fears.

The letter said: "We need to make a much bigger profit if we are to pay our debts, pay ourselves and pay shareholders a dividend, while improving our products and services. We must clearly do something to improve our position."

Eddington added: "It will be a plan that inevitably will be looking to do things differently and more efficiently."

A spokeswoman said Eddington "had not ruled anything in or out", however an industry source hinted the news of possible job losses had come out as pay reviews loom.