After over a year of uncertainty, U.S. airlines can breathe easier now that the U.S. Justice Department is taking a step back from its investigation of collusion, reports Bloomberg.
Since the summer of 2015, the Justice Department has been investigating U.S. airlines for evidence of collusion. The allegations, says Bloomberg, are that the airlines worked together to limit the number of seats available for sale. Fewer seats available led to higher fares for all passengers. (See also: Is the Airline Industry Becoming a Cartel?)
The airlines affected by the Justice Department investigation were Delta Air Lines Inc. (DAL), American Air Group Inc. (AAL), United Continental Holdings Inc. (UAL) and Southwest Airlines Co. (LUV).
However, a person familiar with the investigation told Bloomberg that the Justice Department investigators did not find enough evidence to support a case and that it is unlikely that the department will file formal action against the airlines.
In 2015, a Bloomberg article said, “Airfare decisions normally are among the most closely guarded secrets at airlines before they’re announced, and upon announcement they trigger intense scrutiny by competitors and bargain-hunting travelers.”
In the same article, Bloomberg quoted critics of the Justice Department probe. These critics said there was no evidence of collusion between the airlines in 2015. In fact, said one analyst, the number of seats for sale (capacity) was growing faster than investors wanted. (See also: Falling Prices, Revenue Hit Airlines.)
In response to the investigation, Delta Spokesman Trebor Banstetter told Bloomberg, “We have always determined our capacity independently, and therefore we don’t expect DOJ to take any action.”
American Airlines Spokesman Matt Miller told Bloomberg that the airline cooperated in the investigation and said, “We are confident DOJ will reach the same conclusion we have: That American has done nothing to violate the law.”
Southwest and United offered no comment on the investigation.
