American, Delta, United Sued Over Pricing Changes
April 19 2016 - 4:30PM
Dow Jones News
A federal lawsuit filed Monday in San Francisco on behalf of a
number of travel agents alleges the nation's three largest
airlines' enacted new rules to block their least expensive prices
from being used on many connecting and multi-city trips, a
"conspiracy" to raise fares in violation of antitrust laws.
The complaint named as defendants American Airlines Group Inc.,
Delta Air Lines Inc., United Continental Holdings Inc., and Airline
Tariff Publishing Co., which collects and distributes airline fare
data world-wide and is partly owned by the three U.S. carriers.
Before the new policies, reservations computers would find the
lowest price for each one-way flight in an itinerary and add them
up to one price for the trip. But now the least expensive fares
can't be combined and travelers need to purchase each flight
separately to get the lowest prices on trips with multiple
stops.
In recent weeks, Delta initiated the change and American and
United quickly matched.
The new rules have raised the prices on multi-city trips, and,
according to the suit, the airlines have put travel agents on
notice that they could be required to pay the airlines the
differences between the lower one-way tickets and the new higher
prices.
According to the lawsuit, the airlines "have the ability, are
likely and have threatened to penalize plaintiffs, including by
terminating their ability to book flights and purchase tickets as
travel agents, and by imposing substantial penalties on them if the
plaintiffs do not abide by the policies and rules set by" the
airlines.
American Airlines, the No. 1 U.S. airline by traffic, said the
claims made in the complaint are "completely without merit," and
said it will "vigorously" defend itself. American said it changed
its rules to ensure that "new lower fares we introduced would be
available to passengers flying the route for which the fares were
intended." The move "eliminated a loophole in the fare rules that
allowed some people to construct connections that combined two
nonstop fares," the company said.
No. 3 United said it strongly disagrees with the contention that
its recent fare changes are a result of illegal coordination.
"United makes changes to its prices or fare rules unilaterally, to
ensure its competitiveness…" the company said. "We will vigorously
defend against this lawsuit."
Delta, the second-largest U.S. carrier, said it declined to
comment on pending litigation.
A spokeswoman for Airline Tariff Publishing said the company is
aware of the allegations made in the lawsuit, called them
"meritless" and said it will defend itself vigorously.
Airlines have been putting a lot of deeply discounted fares into
markets to counter growing ultra-discounters such as Spirit
Airlines Inc. and Frontier Airlines Inc. This has set up some
mini-fare wars in major cities as the players offer big savings to
fill seats.
The complaint was brought by Alioto Law Firm in San Francisco, a
specialist in prosecuting private plaintiffs' antitrust actions and
one with a long history of suing the airline and travel industry.
The lawsuit seeks to enjoin the defendants from engaging in alleged
restraint of interstate trade and from penalizing travel agent
plaintiffs.
Write to Susan Carey at susan.carey@wsj.com
(END) Dow Jones Newswires
April 19, 2016 16:15 ET (20:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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