American Airlines has reached an agreement, where they’ve settled an antitrust lawsuit on fare collusion, and will be forced to pay $45 million. Other airlines involved are Southwest Airlines, who has paid $15 million, where Delta Air Lines and United Airlines have yet to reach an agreement.
Despite the settlement, according to American Airlines they deny any wrongdoing in their settlement, however clearly you don’t pay $45 million if that was the case. Other airlines involved, including Delta claim they haven’t done anything illegal. The actual claim is that these four airlines have colluded to limit plane capacity in order to increase prices of domestic airfares.
American Airlines Group Inc. agreed to pay $45 million to end a consumer antitrust lawsuit that accused it and three other major U.S. airlines of colluding to limit plane capacity and drive up domestic airfares.
The Fort Worth, Texas-based carrier is the second to settle in the three-year-old litigation. Southwest Airlines Co. won preliminary court approval for its offer to pay $15 million and cooperate in the case in January. American, too, has pledged its cooperation as the litigation continues against United Continental Holdings Inc. and Delta Air Lines Inc.
The four airlines’ fares rose substantially even though demand was stagnant and the price of jet fuel, one of the largest costs for airlines, was declining, according to the consumers. Executives for those companies are accused of assuring one another that they’d adhere to “capacity discipline” and of carrying out their scheme by limiting consumer ability to compare prices and deter market entry by foreign rivals.
What are your thoughts on the lawsuit, and American Airlines setting for $45 million. Do you think the airline was in the wrong doing, or are they simply setting to make this lawsuit go away? Feel free to share your thoughts in the comments below.