British Airways and Virgin Atlantic have agreed to pay passengers around €103.5 million to settle US 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 to €60 for a typical BA or Virgin long-haul return flight, the FT said yesterday.

The Times newspaper said that BA will pay $140 million in compensation after a provisional settlement was reached last night.

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

BA chief executive officer Willie Walsh had said last August that its provision of €350 million was sufficient to cover all fines related to its fuel-surcharge price fixing.

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