British Airways faces a joint US-UK investigation into price fixing.

The probe is on ticket prices, and particularly the fuel surcharges airlines have been adding to offset the rising cost of oil.

Peter Sherrard from Ryanair, has come out saying it's "about time that British Airways' rapacious fuel surcharges were investigated. It is ridiculous that as the price of oil has doubled, British Airways has increased its fuel surcharge 14-fold", reports The Guardian.

Two senior executives, Martin George, the British Airways commercial director, and Iain Burns, head of communications, have been put on leave with the investigation under way. "It's on the passenger business and it seems to be the full pricing methodology which sounds rather serious...It has a few more suspicious elements that sound rather serious to me. George is easily among the top four or five people at the airline,'' Morgan Stanley analyst Penny Butcher told Bloomberg.

But the economics of the airline industry, rising costs and demands of regulatory regimes means that the price-setting problem is complex, writes The Times:

"Not so long ago pricing and traffic-sharing agreements between flag carriers were the officially sanctioned norm. Once competition was given its head, the industry bred cutthroat pricing, heavy lobbying, protection and dirty tricks, with competition authorities watching on eagle-eyed.
"Executives would have to be exceptionally reckless to discuss or agree price changes with their competitors in this atmosphere. As other cases have shown, however, executives under cost pressure can be reckless and minor participants will reveal all to escape punishment and dish their rivals.
"The length of time that has already elapsed suggests, however, that competition sleuths may be investigating grey areas between collusion, legitimate alliance and price leadership.
"Many of the world's top airlines now take part in groupings such as the Star alliance that share facilities and co-operate in marketing. If viewed with a jaundiced eye, their tickets might as well have "this is a cartel" written on them. Yet this is deemed acceptable, because it is open, in a world where US protectionist rules hamper the full merger of airlines into global companies.
"Price leadership is a perennial conundrum for competition hounds, especially when costs are rising. We have all seen it happen. When banks change customer terms or oil companies change petrol prices, they all do it together. We have no problem when they cut prices; that is competition. When they all move the other way, it looks suspicious but need not mean that a cartel is operating."