Last updated: 12:17 PM ET, Tue September 22 2015

Report: DOJ Now Looking At Airline Shareholders

Airlines & Airports | Rich Thomaselli | September 22, 2015

Report: DOJ Now Looking At Airline Shareholders

If you are an investor in one of the four major U.S. airlines, be prepared for the Department of Justice to come knocking at your door.

Bloomberg News is reporting that officials from the DOJ, who are investigating American, Delta, United and Southwest for alleged collusion amongst each other in terms of seat availability and airfare, are now turning their attention to major shareholders and whether the airlines also colluded with them.

The DOJ in June sent “civil investigative demands” letters to U.S. airlines to say it intends to investigate whether the carriers are in collusion to limit seat availability, which in turn drives up airfares on existing seats.

NBC News noted that this civil antitrust investigation is narrowed to the question of “whether airlines illegally signaled to each other how quickly they would add new flights, routes and extra seats.”

The DOJ wants records and communications between the airlines as well as with analysts and shareholders to determine if "industry capacity" was discussed, according to an official information request reviewed by Bloomberg News.

According to the story, “The requests come as antitrust officials examine arguments that consumers pay more when the same large investors hold shares in the biggest airlines. These officials have examined at least two academic papers arguing that consumers suffer when there is such overlapping ownership, according to people familiar with the matter. One of the studies shows that airfares are on average as much as 11 percent higher than they’d be otherwise due to common ownership.”

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