SENATOR BLUMENTHAL REQUESTS DOJ INVESTIGATION
July 21, 2015
Last week, Senator Richard Blumenthal (D-CT) urged the U.S. Department of Justice (“DOJ”) to investigate allegedly anti-competitive behavior and collusion among airlines. In his letter to DOJ’s antitrust chief, Senator Blumenthal requested the investigation citing the coordinated behavior of airlines to reduce capacity and artificially raise fares. The Senator discussed the recent IATA conference in Miami, where the leaders of Delta, Air Canada and American Airlines made comments which indicated that they were aligning fares and/or coordinating behavior to prevent smaller airlines from expanding capacity and cutting prices. Referencing a report in the New York Times that Southwest had reversed course on its plans to expand capacity (and potentially cut fares), the Senator cited his concern that Southwest had been pressured by the other airlines at the conference to take this action.
The Senator also noted that the “unprecedented consolidation” of airlines has resulted in four airlines accounting for eighty percent of all domestic travel. He went on to point out statements made in DOJ’s antitrust lawsuit complaint, filed in 2013 to block the proposed US Airways/American Airlines merger, detailing instances of coordinated behavior. He urged DOJ to conduct a full-length investigation of the practices of the airline industry, paying special attention to pricing patterns of airlines and the comments of the executives at the conference, and to enforce antitrust laws to punish the airlines if their behavior towards Southwest was found to be collusive.
If you have any questions, please contact Evelyn Sahr (esahr@eckertseamans.com, 202-659-6622) or Drew Derco (dderco@eckertseamans.com, 202-659-6665).