UK authorities have raided British Airways as part of a joint US investigation into an alleged cartel over passenger ticket pricing - sending shares in the UK flagship carrier into freefall.
BA, Europe's third-largest carrier, said the investigation by the Office of Fair Trading and the US Department of Justice involved allegations related to "pricing of passenger air transportation, including fuel surcharges".
The carrier said its commercial director Martin George and head of communications Iain Burns had been given "leave of absence" during the investigation.
The OFT said: "We can confirm that we are investigating British Airways about alleged price coordination by airlines in relation to surcharges on long-haul flights to and from the UK.
"The investigation is at an early stage so no assumption can be made at this stage as to whether there has been an infringement of competition law."
If found guilty of operating a price-fixing or market-sharing cartel, airlines can expect to be fined as much as ten per cent of their worldwide sales - with penalties running into many millions of pounds.
The investigation follows a price-fixing inquiry involving a irlines' cargo charges announced in February which spread to carriers in the United States, Europe and Asia. That investigation is still proceeding.
BA shares, which had been trading at five-year highs, yesterday slumped around six per cent following the news.
"We would be very surprised if a specific issue relating to BA's pricing has developed. Unfortunately, though, putting key personnel on leave is a difficult signal for the market to interpret," Deutsche Bank analysts said.
The OFT said it had visited BA's offices on June 13 as part of a civil and criminal investigation into alleged price coordination.
American Airlines, BA's Oneworld alliance partner, said it had been contacted by US authorities about the probe but was not implicated.
"American Airlines has received a United States federal grand jury subpoena in connection with a government investigation into alleged price fixing in the air passenger industry," it said in a statement.
United Airlines and Sir Richard Branson's Virgin Atlantic also said they were cooperating with authorities.
Some major airlines, including Air France-KLM, Germany's Lufthansa, Australia's Qantas Airways and Ireland's Aer Lingus said they were not involved in the investigation. BA's Spanish partner Iberia said it was not under investigation.
BA and many of the world's biggest cargo carriers were involved in a global investigation into suspected cargo price-fixing that was launched by authorities in Europe, the United States and Asia in February.
That inquiry centred on surcharges that airlines have imposed for fuel, added security since the September 11, 2001 hijackings in the United States, and higher war risk insurance.
Jet fuel costs for airlines have soared in the past year on record-high oil prices, prompting many airlines to impose surcharges.
BA first introduced a fuel levy in May 2004 which it last raised in April this year after crude oil prices nosed above $70 a barrel.
The airline said in a state-ment its policy is "to conduct its business in full compliance with all applicable competition laws" but declined to comment further.
Shares closed 21.75p down at 346.