British Airways hit by price-fixing probe
British and US regulators look into whether carrier fixed fares and fuel surcharges; Virgin, American, United cooperating with investigation.

LONDON (CNN) - British and U.S. regulators are investigating alleged price fixing of passenger fares and fuel surcharges by British Airways and other airlines, according to a statement issued Thursday from British Airways.

The London-based airline said it was cooperating with Britain's Office of Fair Trading (OFT) and the U.S. Department of Justice in their probe of possible cartel activities.

BA also said two of its senior managers - commercial director, Martin George, and head of communications, Iain Burns - had been given leave of absence during the investigation.

In its statement, BA said it would follow its policy "to conduct its business in full compliance with all applicable competition laws."

The OFT said it had visited BA's business offices on June 13 "as part of an investigation into alleged price co-ordination by airlines in relation to fuel surcharges for long-haul passenger flights to and from the UK."

"The OFT's investigation is at an early stage," it said in a statement. "No assumption should be made at this stage that there has been an infringement of competition law."

Neither BA nor OFT have provided any other details concerning the probe.

BA (down $4.36 to $63.43, Charts) shares were down almost 6 percent during midday trading Thursday in London.

Meanwhile, three other airlines - Virgin Atlantic, American Airlines (up $0.06 to $25.68, Charts) and United Airlines (up $0.21 to $32.46, Charts) - said they were also cooperating with the investigation.

Tim Wagner, a spokesman for American Airlines said, "American Airlines has received a United States federal grand jury subpoena in connection with a Department of Justice investigation into alleged price fixing in the air passenger industry. American has not been informed that the company is a target of the investigation. American is cooperating fully with the investigation."

News of the probe comes five months after U.S. and European Union officials said they were looking at allegations of price fixing on surcharges for fuel, security and insurance in the air cargo industry.

BA confirmed in February it was one of the carriers to receive a request for information from European Commission regulators and the U.S. Department of Justice "relating to alleged cartel activity involving BA and a number of other airlines and cargo operators."

European and U.S. officials have declined to give details about the cargo probe.


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