BA and Virgin seen settling U.S. claims

British Airways and Virgin Atlantic have agreed to pay passengers around $204 million (103.5 million pounds) to settle U.S. claims they conspired to fix fuel surcharges on transatlantic routes, the Financial Times said.

The newspaper said it was claimed the airlines colluded to improperly inflate their fuel charges on international flights between August 2004 and January 2006.

During that period surcharges rose from 5 pounds ($9.85) to 60 pounds for a typical BA or Virgin long-haul return flight, the FT said on Friday.

The Times newspaper said that BA will pay $140 million in compensation after a provisional settlement was reached last night, with an announcement expected on Friday or Monday.

The Times added that the settlement brings BA's total payout to for conspiring to fix fuel surcharges to 338 million pounds - 12 million short of the total set aside for such penalties.

BA Chief Executive Willie Walsh had said last August that its provision of 350 million pounds was sufficient to cover all fines related to its fuel-surcharge price fixing.