Justice Dept. Opens Anti-Trust Investigation Over Airline ‘Capacity Discipline’

By Paul Riegler on 2 July 2015
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DSC_0441 (1)The U.S. Department of Justice has opened an investigation into possible collusion amongst major airlines in the United States to limit the number of available seats and thereby maintain high ticket prices.

Federal prosecutors have sent subpoenas to several airlines investigating that the department termed “possible unlawful coordination.”

The move follows a wave of airline mergers that were approved by the department, which at the time said that the combination of American Airlines and US Airways would benefit consumers.  At the time, William J. Baer, an assistant attorney general who heads the department’s antitrust division, said that the merger would “disrupt today’s cozy arrangements” among carriers.

More recently, several CEOs of major airlines have publicly spoken of “capacity discipline.”  In a letter from Senator Richard Blumenthal to Baer sent in mid June, the senator wrote that senior executives from American Airlines, Delta Air Lines, and Air Canada were using that phrase as a cover for what might be construed as anti-competitive behavior, and urged that the Justice Department launch an investigation.

Prosecutors have asked for documents from the last two years relating to statements and decisions the airlines have made about such capacity discipline.

Today, approximately 80% of the nation’s air traffic is held by four airlines, namely American Airlines, Delta Air Lines, United Airlines, and Southwest Airlines.

Spokesmen from American, Delta, and United told Frequent Business Traveler they were cooperating with the investigation.

(Photo: Accura Media Group)

Accura News

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