Senator Urges Justice Dept. Inquiry Into Anti-Competitive Airline Behavior

By Paul Riegler on 18 June 2015
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DSC_0601A Democratic senator called for a federal investigation into possible “anti-competitive” behavior among larger airlines in the United States.  The complaint follows a wave of mergers over the past decade, which left the industry with fewer – but larger – carriers.

Senator Richard Blumenthal asked the Department of Justice on Wednesday to investigate whether airlines were engaging in anti-competitive behavior and collusion to limit capacity and drive up passenger fares.

The senator said in a letter to William J. Baer, the head of the department’s antitrust division that, at a recent industry event, senior executives from American Airlines, Delta Air Lines, and Air Canada were using the phrase “capacity discipline” as a cover for what might be construed as anti-competitive behavior.

“At best, these remarks reflect participants in an overly consolidated market aligning supracompetitive fares,” Blumenthal wrote. “At worst, they may be a strategic attempt to coordinate behavior – specifically designed to encourage Wall Street to punish smaller rival airlines that have announced plans to expand capacity and cut prices.”

“Consumers are paying sky-high fares and are trapped in an uncompetitive market with a history of collusive behavior,” the senator wrote. “If you find that these comments were coordinated to punish Southwest Airlines’ announcement of capacity increases, I urge you to use all the tools at your disposal to punish this anti-competitive and anti-consumer behavior.”

(Photo: Accura Media Group)

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