SUIT ALLEGES PRICE FIXING American, Delta and United accused of conspiring to boost ticket prices

Posted on 04/21/2016 | About San Francisco, California

More than 40 airline passengers and travel agents have filed an antitrust lawsuit against American Airlines, Delta and United, accusing the three of collusion. The suite alleges that the three carriers inflated fares for multicity itineraries in the US.

The lawsuit was filed this week in the US District Court in San Francisco. It also named the Airline Tariff Publishing Co. (ATPCO) which distributes airline fare data and is partially owned by the airlines. 

The complaint alleges that starting April 1, the three carriers conspired to enact pricing policies in which multi-leg itineraries were priced much higher than if the customer bought each leg separately as one-way tickets. 

“Plaintiffs are now required to expend an inordinate amount of time booking individual one-way legs of multicity flights in order to save their customers hundreds, and in some cases thousands, of dollars they would otherwise be required to pay as a result of the airline defendants’ price fix. 

“In many cases, the time required to book the identical multicity trip has increased from approximately five minutes to 20 minutes or more by reason of the need to enter full data sets for each passenger on each one-way leg and obtain a Personal Name Report (“PNR”) for each leg. This is a time-consuming process for which plaintiffs cannot be compensated.” 

The carriers are also accused of enacting more restrictions that “eliminated the ‘combinability’ of lower, non-refundable, one-way fares,” further boosting ticket prices, according to the complaint. 

ATPCO was included as a defendant because “it aids, abets and enables its airline owners, including the airline defendants, to fix prices on airfares,” the complaint reads. 

The lawsuit also contends that, "Each (of the airlines) announced their agreement in substantially identical terms in written notifications given to members of the travel agency industry." 

American, Delta and United account for more than 70 percent of revenue from US airline passengers, according to the complaint. 

American said the plaintiffs' claims were "completely without merit." 

“We recently made a unilateral change to our fare rules to ensure that new lower fares we introduced would be available to passengers flying the route for which the fares were intended. In doing so we eliminated what was, in effect, a loophole in the fare rules that allowed some people to construct connections that combined two nonstop fares,” said American Airlines spokesman Casey Norton. 

United spokesman Jonathan Guerin said, “We strongly disagree with the contention that United’s recent changes in its fare rule are a result of illegal coordination. The combinability rule had permitted connecting customers to circumvent United’s inventory controls and combine the two one-way fares into the same ticket, resulting in prices that were different than what United intended for the connecting itinerary. United changed fare rules to disallow these unintended fare combinations.”