Price Collusion?

So I got all excited by the BA sale that I snapped up a cheaper-than-recently-quoted fair to CPT for later this year that I didnt check the VS sight before booking (yesterday VS was +/-900 for the same dates - which was to the penny the same price as BA).

Now thinking I would be all smug about how much I had saved, it turns out VS has adjusted down the cost of all their flight - to within 1 of the new BA sale prices.

Now come on... you cannot tell me there is no price collusion on this route... or am I just kicking myself for not checking?? On the plus side I get to use T5... from teh adverts it seems like only 10 passengers a day use it??

Airlines monitor each others activities and respond accordingly, so this would just have been Virgin reacting to BA's move, nothing sinister!!

Originally posted by Daffy
Airlines monitor each others activities and respond accordingly, so this would just have been Virgin reacting to BA's move, nothing sinister!!

Thats very idealistic.

VS recently blew the whistle on the VS/BA price agreement, which resulted in 5 BA executives being taken to court by the OFT. VS got off as they blew the whistle on the agreement.

Interesting EU/UK law takes this kind of thing very seriously, nothing needs to be formally written down for it to be illegal all it would take would be an agreement over a drink for example to keep fares within £2 of each other.

Of course what is more realistic in this case is that VS predicted when BA was going to put a sale on.

It's always interesting, this. You can't expect Virgin not to react to a British Airways fare cut, and it seems that VS launched their seat sale a few days earlier... if theyt are flying on identical routes than the fares will be similar. It's not the case that they will undercut each other just for the sake of it, otherwise where would that end?

The collusion court case concerned, iirc, fuel surcharges, and it seems that BA approached Virgin to see how much they were planning to charge. This could have been from the entirely innocent perspective of trying to gauge the market, but it's illegal.

Originally posted by Sealink
It's always interesting, this. You can't expect Virgin not to react to a British Airways fare cut, and it seems that VS launched their seat sale a few days earlier... i

The collusion court case concerned, iirc, fuel surcharges,

Yup I agree they would be pretty much in line, but its just strange timing. CPT is excluded from the VS seat sale, it just seems they released a whole lot of new N fares in response. This would bring the price down without it being a sale. Suppose Im just p!ssed at flying BA but its my fault. Was searching around yesterday and the sheapest i could find direct was £928 (indirect £700 with LF - sorry i dont count flying via middle east as indirect). At least i got a good saving so i'm happy with that.

Incidently, talking about fuel surcharge (and u are right about the collusion case being about that) my ticket is £299 and £300 of taxes. Can we call BA a low cost carrier then?

Originally posted by willd

Originally posted by Daffy
Airlines monitor each others activities and respond accordingly, so this would just have been Virgin reacting to BA's move, nothing sinister!!

Thats very idealistic.

VS recently blew the whistle on the VS/BA price agreement, which resulted in 5 BA executives being taken to court by the OFT. VS got off as they blew the whistle on the agreement.

Interesting EU/UK law takes this kind of thing very seriously, nothing needs to be formally written down for it to be illegal all it would take would be an agreement over a drink for example to keep fares within £2 of each other.

Of course what is more realistic in this case is that VS predicted when BA was going to put a sale on.

I used to work for an airline in the same league as Virgin, BA and the rest and all airlines submit their general prices to a independent company which then distributes them 5 times a day to all the travel agents, airlines own systems etc. Airline Pricing areas have loads of people looking out for these submissions so they can react or ignore. Means within half a day you could have a similar price available. All very cat and mouse but every airline does this so a bit much to say its colluding. If they came out at exactly the same time then I'd raise an eyebrow!!

They haven't matched them on PE seats for the Bridgetown Test next year though [:(]

BA - Low Cost Carrier? I think Ryanair would be offended by that! BA haven't (yet) started to charge you to breath...

Originally posted by capetownflyer
Incidently, talking about fuel surcharge (and u are right about the collusion case being about that) my ticket is £299 and £300 of taxes. Can we call BA a low cost carrier then?

Just as BA and VS look at what each other are doing with fares, John Lewis has teams of people who look at competitors pricing and adjust theirs to suit. Is this collusion? Heck no, just common sense so I think its about time to bin at least the 'collusion' part of this thread.

£299 is actually quite expensive for BA ... there have been times recently where the actual ticket price has been £50-70 plus the £300 odd of extras.

I work for a big famous hotel, and we constantly get calls from competitors asking how many rooms we have left to sell, what we are selling for that day, and what we have available for the next seven days. They got short shrift. They are attempting to collude and we do not disclose this information. How many rooms we have left is our business, not theirs, and if they want to know prices, they are available on our website.

This is where BA slipped up - the price they set for fuel surcharges should not be dependent on what Virgin are charging. Competiting on price is one thing, but BA hedged their fuel at a set price - so the surcharge should reflect this, not what others are doing. I think BA spent too much time looking over their shoulder rather than looking ahead.

Originally posted by slinky09
Just as BA and VS look at what each other are doing with fares, John Lewis has teams of people who look at competitors pricing and adjust theirs to suit. Is this collusion? Heck no, just common sense so I think its about time to bin at least the 'collusion' part of this thread.

That is true. But the problem comes when the price change is at exactly the same time.

JL is a difficult one, they will always match a price on the high street, as this is what they have based their brand around, although as a consumer you often to have to tell them you have found it cheaper (as I recently did with a fridge). VS also do the same I believe if you can find a VS ticket cheaper on other sites.

I believe the OP originally called it collusion as surely there should be some sort of time difference between the changes in price? Also how can we say that it is not collusion?

The law is pretty strict on all of this. If BA rung VS and gave them a heads up that they are about to change the price of a flight to CPT prior to it being published and VS did the same then this is regarded as price fixing.

Of course the problem the UK and EU authorities have is proving any of this is taking place. This is why the benefits to a whistleblower are so great and this little debate over what collusion is or is not proves that exact problem.

Months ago I priced up LHR-SFO-LHR and BA was 30p cheaper (i decided I wanted my bags in SFO) and chose Virgin(no choice really )

I can't remember the price breakdown-if BA was the same or less/more on fuel surcharges but the overall price was virtually the same, this has got to be price collusion!

Not complaining, a seat is only worth what you are willing to pay, and both Virgin and BA's prices were within what I considered reasonable so don't feel ripped off but I do feel slightly suspicious.

I think if there is a situation where special offers are withheld from certain routes then I would be suspicious... but I would repeat that one airline isn't going to stand by and allow their competitor to steal a march with cheaper fares.