Stuart Smith's Blog

With one farce playing on at Whitehall, it’s easy to overlook another at Southwark Crown Court that flopped almost instantly.

“Ludicrous”, “disgraceful”, “shabby”, “cynical” were  some of the kinder epiphets being showered upon it by the critics – most of them in the legal profession. Yes, I’m talking about the Office of Fair Trading’s case against four BA executives for alleged price-fixing. After four years of painstaking preparation, the trial collapsed before a single witness took the stand; inexplicably, the prosecution had sat upon email evidence that immediately exonerated the defendants from any suggestion of conspiracy.

No doubt heads should roll – those of John Fingleton at the OFT and Steve Ridgway at Virgin Atlantic come to mind; yet it is the heads already lying in the blood-stained sawdust which are my main concern here. And one in particular, that of Martin George, formerly commercial director of BA: judged guilty before he was proved innocent.

There was a time when reputations in marketing didn’t come any higher than George’s. The mild-mannered, aimiable executive constantly topped surveys of the great and good in marketing. And rightly so. He was, after all, in charge of one our most vibrant brands (I’m talking about quite a few years ago) and was one of the few marketing directors who had made it onto the board of an FTSE 100 company. Capping it all, he looked chief executive material. Only narrowly was he pipped to the top post at BA by former pilot Willie Walsh in 2005.

But it was downhill fast after that. Once details began to emerge the following year of an alleged conspiracy to fix aviation fuel price surcharges – thanks to Virgin turning whistleblower – George was barely able to hold down a proper job. Who would, with maybe a five-year prison sentence hanging over them? Hounded out of BA later that year, he applied unsuccessfully for the Manchester United commercial role (filled, briefly, by ex-Saatchi ceo Lee Daley) and has since had to content himself with the role of interim group marketing director at BUPA (where he still is), and whatever below-the-radar consultancy tasks have come his way. Nothing, I imagine, within the range of the £450,000 or so a year he earned at BA.

George, like the three other defendants, has always maintained his innocence, although he did take responsibility for his department’s actions. Here’s what he said on resigning from BA:

“I now recognise that within my department, there may have been inappropriate conversations in violation of company policy in relation to long-haul fuel surcharges. I was not involved in such conversations. Although the board of BA have not found that I have behaved in a dishonest way, I fully recognise my responsibilities as head of department and as a board director.”

Time has proved George was right to maintain his innocence – but at what a cost. Ridgway, by contrast, now finds himself in an interesting situation. By whistleblowing to the OFT he implicitly admitted criminal dishonesty in order to save his own skin – even if that meant landing someone else in jail.

With the case blowing up in his face like this, his position is surely untenable. The 70,000 emails that Virgin has so mysteriously rediscovered – if they do nothing else – fundamentally undermine any conspiracy theory. They establish that Virgin had previously, and unilaterally, determined to raise the fuel price surcharge to what turned out to be the same level as BA’s.

Even speculatively, the notion of a cartel looks pretty flimsy. Why would BA and Virgin bother in the first place? Fuel surcharges are a minor part of the ticket price. And, as one of the counsels for the defence has pointed out, BA and Virgin competed on no more than 20 of BA’s 219 routes at the time. Only on three of these routes – Orlando, Grenada and Trinidad – was there no other competition. Now that hard contradictory evidence has come to light, the trial looks like a stitch-up which relied on witnesses with an agenda.

I’ll leave you with the words of George’s counsel, Clare Montgomery QC: “The world has turned upside down. If you say you are honest in making an agreement, then you may go to prison. If you say you did nothing wrong, then you’re at risk of being charged. But if you say you were dishonest, then you and your company will not be punished, you will keep your job.”

I wonder where that leaves Martin George and his career prospects?