Tags: airline | collusion | fix | fares

Airline Collusion Plot Under Investigation: Did Companies Fix Fares?

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By    |   Thursday, 02 Jul 2015 12:10 PM

Possible airline collusion amongst several major domestic airlines is being investigated by the U.S. Department of Justice to determine whether the airlines are illegally collaborating with one another to keep airfares high.

This investigation, which has been underway for two months, became public knowledge when the DOJ began issuing civil investigative demands on Tuesday to airlines including United Airlines, Delta Airlines, Southwest Airlines, and American Airlines, according to The Associated Press. Justice Department spokeswoman Emily Pierce confirmed that the department in looking into potential “unlawful coordination” during this civil antitrust investigation into whether the airlines illegally signaled to one another details about new flight, route, and extra seat additions.

Major U.S. carriers also received a letter on Tuesday that demanded copies of the airlines’ communications with one another, as well as plans for passenger-carrying capacity discussed by Wall Street analysts and major company shareholders, according to CBS News.

Airlines in America, a trade group that represents many carriers, said, “We are confident that the Justice Department will find what we know to be true: Our members compete vigorously every day, and the traveling public has been the beneficiary, as the DOT's own data shows that domestic fares are down in 2015. It is customers who decide pricing, voting every day with their wallets on what they value and are willing to pay for,” according to CBS News.

After a series of airline merges began in 2008, Delta, American, Southwest, and United Airlines control more than 80 percent of the domestic travel market, according to NBC News, which led to a $19.7 billion profit in the past two years as jet fuel prices dropped and the airlines added new bag-checking and reservation-change fees.

“The analyst community is bringing up the subject. You certainly can't fault an airline executive for responding to the question," said Wolfe Research analyst Hunter Keay, according to the AP. “The capacity continues to grow at the airports people want to fly to, and air travel remains a particular good value for the consumer, especially for the utility that it provides.”

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Possible airline collusion amongst several major domestic airlines is being investigated by the U.S. Department of Justice to determine whether the airlines are illegally collaborating with one another to keep airfares high.
airline, collusion, fix, fares
345
2015-10-02
Thursday, 02 Jul 2015 12:10 PM
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