Are airlines working together to keep fares high?

Are airlines working together to keep fares high?

On behalf of Kadish & Associates Law Group posted in Business Litigation on Thursday, July 9, 2015.

If you have been planning a vacation and are looking for cheap fares, you may be surprised that airline tickets are still pretty pricey compared to last year. This may be especially interesting given that fuel prices are lower than they were a year ago.

In year’s past, when fuel dropped, ticket prices would follow, since airlines would see this as an opportunity to add more flights to a particular route, since sending more people would cost less and it would lead to more money being made. Which begs the question now: why are fares still expensive?

The U.S. Department of Justice would like an answer to this question as well. It appears that it believes that some airlines worked together to keep fares high; which would be a violation of antitrust law. The legal term for this course of action would collusion. In fact, the Justice Department has launched an investigation to determine if airlines deliberately worked in concert to protect their pocketbooks.

According to an ABC News.com report, the investigation is at its early stages, with only letters going out to American Airlines, Delta Airlines, Southwest Airlines and United Airlines. These companies were selected since they control a large majority of the seats available on domestic planes.

Despite the probe, the airlines maintain that they have done nothing wrong, and they are merely responding to market demand with their pricing. It remains to be seen what will become of the investigation, but there is history of improper agreements between airlines to raise fares.

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