British Airways was fined a record £270 million today after an unprecedented transatlantic investigation into the illegal price-fixing of fuel surcharges on passenger and cargo services around the world.

In a damning verdict, the US Department of Justice this afternoon shamed BA as a “conspirator” and hit the airline with a $300 million (£148 million) sanction.

It came just hours after the Office of Fair Trading charged BA with a fine of £121.5 million, the biggest ever levied by the watchdog for a breach of UK competition law. Together the two fines total £270 million.

Willie Walsh, BA chief executive, spoke of his “deep regret” as the airline desperately battled to recover from yet another blow to its reputation.

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Today’s verdicts followed a year-long investigation by authorities on both sides of the Atlantic into collusion between BA and Virgin Atlantic in setting fuel surcharges between 2004 and 2006.

A separate, parallel investigation has been continuing into the price-fixing of surcharges on freight services.

William W Mercer, acting associate attorney general at the US Department of Justice, said BA’s illegal activity had left American consumers “picking up the tab”.

He added: “Today’s enforcement actions demonstrate that the Antitrust Division will investigate and prosecute illegal cartel activity – here and abroad – in order to ensure that American consumers and businesses are not harmed by illegal cartel activities.”

Philip Collins, OFT chairman said: “This case, and the substantial penalty imposed, will send an important message to corporate boards and business leaders about our intention to enforce the law.”

He added that the fine would have been higher if BA had not admitted any wrongdoing.

Virgin qualified for conditional immunity from investigations on both sides of the Atlantic after blowing the whistle on the price-fixing.

Details revealed for the first time today showed that BA and Virgin corresponded regularly between 2004 and 2006 over when to increase their respective surcharges, introduced to cover the spiralling cost of jet fuel.

During the two-year period, the surcharge rose from £5 to £60 for passengers booking return tickets on long-haul flights.

Mr Walsh today insisted BA’s passengers had not been overcharged and said that fuel surcharges were a “legitimate way of recovering costs”.

But he added: “This does not in any way excuse the anti-competitive conduct by a very limited number of individuals within British Airways.

“Anti-competitive behaviour is entirely unacceptable and we condemn it unreservedly.

“We have a long standing competition compliance policy which requires all staff to comply with the law at all times.

“I am satisfied that we have the right controls in place.

“However it is deeply regrettable that some individuals ignored our policy.”

The OFT could have fined BA up to 10 per cent of its annual turnover – £850 million.

Shares in the airline fell 11.25p to 386.5p but City analysts insisted they were not concerned by the fines.

BA had already set aside £350 million to cover fines from the investigations.

Andrew Light, an analyst at Citigroup said: “This news is already fully priced in.”

BA said the OFT and the Department of Justice in the US were continuing their respective criminal investigations into the conduct of certain individuals.

The airline suspended Martin George, its commercial director, and Iain Burns, head of communications, a year ago and both men later left the airline.

BA and Virgin Atlantic first introduced a fuel surcharge on long-haul routes in May 2004. BA’s surcharge is currently up to £86 on long-haul return flights.

The US Department of Justice also today fined Korean Airlines $300 million.

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