Martin George, commercial director of British Airways, resigned yesterday as the civil and criminal investigation into alleged price fixing by airlines over fuel surcharges intensified.

Mr George admitted in his letter of resignation to Martin Broughton, BA chairman, that "inappropriate conversations" might have taken place over the setting of the surcharges, which have been levied for the last two years on long-haul flights to and from the UK. Iain Burns, BA head of communications, also resigned.

Both men had been on leave of absence since mid-June, when BA first disclosed that the UK office of fair trading (OFT) and the US justice department were investigating alleged cartel activity involving BA and other airlines in relation to the pricing of air fares, including fuel surcharges.

Mr George was a BA board member and a candidate last year for the BA chief executive post won by Willie Walsh, who replaced Sir Rod Eddington. He will be replaced by Robert Boyle, director of planning.

BA said it had discovered, in response to requests from the regulators, that "contacts took place with a competitor in respect of long-haul passenger fuel surcharges". In June, it became known that Virgin Atlantic had helped the OFT with information about its rival BA, which helped to trigger the investigation.

In his resignation letter, Mr George said: "I now recognise that within my department, there may have been inappropriate conversations in violation of company policy in relation to long-haul fuel surcharges. I was not involved in such conversations."

The letter added that the board of BA had not found that Mr George had behaved in a dishonest way. The case is the first test to become publicly known of the OFT's new powers to investigate criminal cartels, acquired under the 2002 Enterprise Act.