In suits, fliers say 4 big U.S. airlines plot to keep prices high

The four biggest U.S. airlines are being sued by travelers claiming the carriers are conspiring to keep ticket prices high in the face of falling fuel prices. The consumer cases were filed as the U.S. Justice Department confirmed it's investigating possible collusion.

Delta Air Lines Inc., United Continental Holdings Inc., American Airlines Group Inc. and Southwest Airlines Co. were sued Thursday in Chicago federal court. All four also acknowledged the receipt of Justice Department requests for information on passenger capacity.

The Chicago lawsuit is at least the second such case filed.

The federal government sued two years ago to block American's merger with US Airways. The Justice Department said then that the largest carriers "increasingly prefer tacit coordination over full-throated competition." The merger went ahead after the government's case was settled.

The accord allowed American to emerge as the world's biggest airline when ranked by paying-passenger miles flown. It ended an era of consolidation that saw the disappearance of America West, Continental and AirTran as stand-alone airlines.

"This increased consolidation has hurt airline passengers," according to the Chicago-filed complaint. "Defendants have, in tandem, raised fares, imposed new and higher fees on travelers and reduced their capacity and service," leaving U.S. customers with fewer choices.

The four carriers named in the lawsuit account for almost 80 percent of the domestic airline market.

The suing fliers are seeking to represent anyone who bought a ticket for domestic air travel from Oct. 1, 2012, to now, together with unspecified money damages. A complaint making similar allegations was filed Wednesday at the federal court in White Plains, N.Y.

The Justice Department seeks airline documents that would reveal the "need for, or the desirability of, capacity reductions or growth limitations by the company or any other airline," according to the government's request for the information.

Fares and capacity are closely linked because having too many seats can dent a carrier's ability to charge more.

Chicago-based United is complying with the government's request for information, Luke Punzenberger, a company spokesman, said Monday in a phone interview. He declined to comment immediately on the Chicago suit against United and the other three airlines.

Trebor Banstetter, a Delta spokesman, declined to comment on the case.

American's media relations department didn't respond to a voicemail message seeking comment on the litigation. Southwest didn't reply to voicemail and email requests for comment.

The Chicago case is Bidgoli v. American Airlines Group Inc., 15-cv-5903, U.S. District Court, Northern District of Illinois (Chicago). The New York case is Devivo v. Delta Airlines Inc., 15-cv-5162, U.S. District Court, Southern District of New York (White Plains).

Information for this article was contributed by Mary Schlangenstein, David McLaughlin and Michael Sasso of Bloomberg News.

Business on 07/07/2015

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