Together, those carriers control more than 80 percent of the domestic seats in the US Now the government will review statements executives made to Wall Street analysts and others. She declined to comment further, including which airlines are being investigated.
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In April, US airlines paid $1.94 a gallon, down 34 per cent from the year before.
DOJ investigators will have to distinguish between diminished competition in the airline industry and actual, active collusion, Moss said.
A spokesperson for the industry defended the airlines saying, “it is customers who decide pricing”, and “our members compete vigorously every day, and the traveling public has been the beneficiary”.
In the previous month, the division started examining the US Treasury trading, moving in line with the successful cases which has been brought against banks for manipulating currency rates.
After a brief industry increase in seats in the spring, American Airlines CEO Doug Parker spoke about the need for capacity discipline to a Reuters reporter at the global Air Transport Association’s annual conference in Miami. Reportedly, small carriers like Frontier Airlines, said they had not been contacted by the Justice Department.
Shares of major airlines sank on the news of the investigation. American, United and Delta are among the slowest-growing carriers, but Southwest plans to expand 7% to 8% in the second half.
Analysts say the industry is strong and would weather possible antitrust fines.
Blumenthal said in a statement that the probe should move fast to prevent “price increases in summer fares that may result from collusive and anticompetitive airline company misconduct”.
The mass control over ticketing and prices of these airlines has meant an average rise in the base domestic airfares of roughly 13 percent between 2008 and 2014, according to the Bureau of Transportation Statistics.
In that four-year period, capacity on domestic flights was virtually flat while the US economy grew about 2.2 percent per year.
Those factors have contributed to lofty airline profits.
The study concluded that travelers were losing more than $6 billion in savings annually because of airlines limiting consumers’ ability to compare prices. At the same time, consumers have been hit with higher airfares, extra fees (such as for checking luggage and changing flights) and often, less legroom. USA Airways merged with American Airlines in 2013, United bought Continental in 2012, Southwest bought Airtran in 2011 and Delta purchased Northwest in 2008. Richard Blumenthal, D-Conn., called on the DOJ to open an investigation into antitrust violations by major airlines.
Displaying a jaw-dropping ignorance of both market competition principles and the ugly financial history of the airline industry in particular.
To prove collusion, industry experts say the Justice Department will look for emails, letters or phone calls that prove the airlines communicated about how much seating capacity to add. The agency is also expected to run an analysis to show whether air fares would be different if the carriers were cooperating with one another.
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In the absence of exchanges explicitly outlining capacity restraints to prop up prices, the Justice Department would have to rely on circumstantial evidence, said Herbert Hovenkamp, who teaches antitrust law at the University of Iowa.
