American Airlines pays out for an antitrust lawsuit

Remember when gas prices (and most all fuel prices, really) fell dramatically as domestic energy production boomed? If you do much traveling by air, you may have found it curious that airline ticket prices stubbornly failed to drop at the same time, particularly since the major airlines constantly claim that fuel costs are one of their biggest expenses and price drivers. If you had been wondering about that, you weren’t the only one. A group of passengers brought a total of 23 different lawsuits against four major carriers, claiming they had engaged in collusion, purposely limiting seating capacity to keep flights full and prices high.

Earlier this year, Southwest Airlines (one of the ones named in the suit) bailed out and agreed to pay a considerable sum. And now American Airlines has done the same thing, signing off on a $45M payment while not admitting any responsibility. (LA Times)

American Airlines, the world’s largest carrier, has agreed to pay $45 million to settle a lawsuit filed by passengers who accused the nation’s biggest airlines of colluding to limit capacity and keep airfares high.

Another large carrier that was accused in the lawsuit, Southwest Airlines, agreed in January to settle its involvement in the case by paying $15 million but continued to reject the allegations in the lawsuit. The Dallas-based airline said it agreed to pay the settlement to avoid spending time and money fighting the case.

The accusations were made in 23 antitrust lawsuits that were consolidated and brought in 2016 before Colleen Kollar-Kotelly, a federal judge in Washington. The lawsuits contend that, starting in 2009, United, American, Southwest and Delta conspired to limit the number of new seats they added to raise airfares despite lower fuel costs.

Why pay off the plaintiffs if you didn’t do anything wrong? American and Southwest are taking the same line on that one. The charges are baseless, they say, but this lawsuit could drag on forever and cost them a lot in legal fees so it was easier and cheaper to pay them and make the problem go away. United and Delta are still refusing to pay and proclaiming their innocence.

We can’t write off that excuse entirely because it certainly wouldn’t be the first time a company has paid off a complainant just to get rid of a nuisance suit. But this wasn’t just a lawsuit about cramped, uncomfortable seats and horrible treatment by the staff. The allegations here are serious and could result in daunting criminal charges if proven true. Congress supposedly began looking into claims of such collusion in 2015, but to date they haven’t come back with anything solid.

Of course, unless they could get somebody on the inside of these companies to flip and provide internal communications showing that they were working together to pack the flights and artificially inflate the prices, could it ever be proven? (And if the airline executives were up to something like that would they be stupid enough to put it down on paper or in official communications?)

For the time being, we really don’t have much to go on beyond gut instinct. Does this sound like something that the major airlines would actually do? Of course it does. But intuition doesn’t hold up well in court. This does give me another idea, though. Anybody want to chip in together and sue them over all the fake service animals that fill the plane every time I have to fly anywhere?

Allahpundit Aug 09, 2022 5:01 PM ET