It would be illegal if they literally colluded, i.e. met and said, "Let's collectively raise prices 10%." However, in practice, one airline will raise prices and then see if its competitors follow. If they do, the price increase remains. If it doesn't, the first airline drops prices back to what it was. In practice, there is no real competition among airlines because there are so few. This is the inevitable result of free-market policies applied without restriction to high-investment services. It is, for all intents and purposes, impossible for a new competitor to enter the market because the investment is so high. Running an airline is not like running a trucking company -- you can't start with one truck and expect to take on the majors by offering lower prices or better service.