Justice Department to investigate airlines for collusion in setting prices
July 06, 2015
If you’re a frequent flyer like me, you’re probably disgusted with how you’re treated as a passenger: crowded seating, delayed flights, inattentive flight attendants, baggage fees, ticket prices that continue to climb, crowded planes, and on and on.
Now, the U.S. Department of Justice confirms that it’s investigating the big airlines for collusion to keep the price of airline tickets high.
It’s been unbelievable to me that what I pay for tickets keeps going up while the price of jet fuel has dropped substantially.
Due to bankruptcies and mergers over the past 10 years, these four major airlines provide service for 80 percent of the nation’s domestic passengers.
The limited competition has helped airlines post some of their biggest profits in history, according to The Washington Post article “Justice Dept. Investigating Potential Airline Price Collusion.” In the first quarter of 2015, American Airlines made $1.2 billion in profit, its most profitable three months ever.
Sen. Richard Blumenthal, D-Conn., applauds the department’s investigation:
What airlines publicly call ‘discipline’ is just a fancy term for constraining the flights available to consumers and raising prices and profits – which should be the investigation's sharp focus. The ongoing inquiry should target the potential misuse of market power and anticompetitive misconduct, evidenced by recent pricing patterns as well as remarks at the recent IATA conference that appear coordinated to punish Southwest Airline’s announcement of capacity increases.
Blumenthal said the department played a part in airline consolidation by approving several mergers and now consumers are paying sky-high fares, as airlines keep capacity artificially low in a market with a history of collusive behavior.
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