U.S. District Judge Colleen Kollar-Kotelly suspected that conspiracy might be in the air—literally. In a 41-page decision released October 28, 2016, the federal court judge allowed a class-action antitrust lawsuit initiated by passengers to proceed against four of the nation’s largest commercial airlines.
From her Washington D.C. courtroom, Kollar-Kotelly wrote that she could “reasonably infer the existence of a conspiracy” on the part of the airline industry leaders.
As a result, she refused to dismiss the accusations of price fixing and antitrust violations brought against American Airlines Group Inc., Delta Air Lines Inc., Southwest Airlines Company and United Continental Holdings Inc.
The litigants, combining 105 separate cases into the single class-action lawsuit, allege that the four major carriers conspired to limit seating capacity growth on their flights, thereby driving up the cost of air travel. Kollar-Kotelly said that there was evidence of such suspicions, citing, in part, statements by airline executives about the need for “discipline” in seating capacity.
She also wrote that, “This restriction on growing capacity was a marked change within the industry. The court is satisfied that at this stage, plaintiffs sufficiently pled parallel conduct.”
The plaintiffs insisted that the carriers started working together to make moves that would jack up fares in a supply-and-demand strategy as far back as early 2009.
If the airlines acted as accused, they appeared to have been highly successful at it. The four main players control about 69 percent of the domestic market. In 2015, the big four nabbed a combined $21.7 billion profit, a staggering figure for an industry that was on the ropes only a few years previously. Low fuel prices and a boost in fees for bag check-in and other add-on flier services also contributed to the windfall.
The litigants’ attorney, Michael Hausfeld, celebrated the decision. “We look forward to moving forward aggressively to secure the relief the public deserves,” he said.
An attorney for one of the carriers derided the decision and said that there was no proof of price-fixing or that the airlines acted in unison.
The case is In re: Domestic Airline Travel Antitrust Litigation, U.S. District Court, District of Columbia, No. 15-mc-01404.
The U.S. Justice Department is also looking into similar charges, as of 2015.