Press reports in London are suggesting that British Airways (BA) will face an enormous fine from US trade regulators investigating price fixing in the transatlantic cargo market.

The investigation, which is spread between the EU, UK and US competition authorities, started last year after allegations were made that BA had had illegal conversations with Lufthansa and Virgin airlines over prices for fuel surcharges in the air cargo and passenger market. Lufthansa paid $80million dollars in a settlement with the US Department of Justice at the beginning of this year, however the investigation into British Airways continued.

The newspaper reports assert that the US Department of Justice will use the announcement of British Airways quarterly results on Friday (3rd August) to make public their judgement. The same press reports suggest that the fine will run into hundreds of millions of pounds sterling. These suggestions are unconfirmed.

What is certainly true is that British Airways has made provision in its accounts for a fine of up to £350million ( $700million/ €575million). US fines in this area are often large as they are based the company's turnover rather than the profits made through the anti- competitive activity itself.

British Airways has recently announced a substantial improvement in its business, with profit margins approaching double figures. However the cargo market remains tough, with the surplus capacity in many markets and pressure on rates being reflected in 'BA World Cargo's' static market share.