The four largest U.S. airlines have confirmed receipt of an investigative demand from the U.S. Department of Justice's antitrust division regarding communications about capacity controls over the past two years.
The DOJ is investigating “possible unlawful coordination” among
some U.S. carriers, said department spokesman Peter Carr, who declined to
elaborate further.
In a statement, American Airlines confirmed the department’s
request and said it would “cooperate fully with the investigation. We welcome
the review as the data shows that the industry remains highly competitive with
more people flying than ever before. Demand has been enabled by a robust and
competitive marketplace in which capacity has been added and average fares have
decreased.”
Southwest Airlines in a statement also said it would “fully
cooperate in answering any questions the DOJ might have of us,” and spokespersons
from United Airlines and Delta Air Lines confirmed receipt of the letter and intent
to cooperate to BTN.
As first reported by The Associated Press on Wednesday, the
department is looking into communications among the airlines and between airlines
and analysts and shareholders regarding capacity
controls in order to keep fares and profits up.
A research note from Cowen and Co. released Wednesday said
the claims “lacked merit. Airlines have recently been competing in Dallas,
Seattle and Chicago to gain marketshare, often at the expense of [passenger
revenue per available seat mile]. Fares have been coming down in response to
declining load factors.”
U.S. Travel Association president and CEO Roger Dow said in
a statement he hoped airlines would be cleared in the investigation but that
the U.S. government should consider it an incentive to adjust airport funding
to allow more terminal space, which would spur new airlines and more competition.
“If not for the radical consolidation we have seen in the airline industry in the last few years, we probably would not even be having this conversation,” according to Dow. “Now that four carriers control 85 percent of domestic routes, ‘collusion’ is a thought that’s constantly going to be in the back of the minds of federal regulators.”