Southwest Airlines has agreed to pay $15 million to settle class-action lawsuits accusing the Big Four U.S. carriers of colluding to raise prices by repressing ticket supply.
According to the Associated Press, Southwest maintains it never broke the law and agreed to the settlement to avoid additional litigation expenses. The Dallas-based airline also agreed to provide information to the plaintiffs and ensure its executives are available to speak with the lawyers for consumers who sued.
Southwest spokesman Chris Mainz said "these cases can go on for years," telling the AP that the settlement will allow the airline to avoid "the considerable time, expense and inconvenience" of continued litigation.
American Airlines, Delta Air Lines and United Airlines also denied any wrongdoing and plan to continue to defend themselves. "We will continue to defend against the claims, which we believe are without merit," American Airlines spokesman Matt Miller told the AP.
The Big Four airlines-which control more than 80 percent of the nation's air-travel market-were hit with dozens of lawsuits in 2015 after the Department of Justice (DOJ) launched an investigation into "possible unlawful coordination by some airlines."
U.S. Senator Richard Blumenthal (D-Conn.) requested the DOJ investigation into potential collusion and anti-competitive behavior a month earlier, citing a New York Times report detailing competing airline executives publicly discussing strategies to remain "disciplined" in their decisions to manage capacity across their flight routes.
Blumenthal's letter also cited the DOJ's 2013 investigation into U.S. Airways' merger with American Airlines, specifically pointing out the agency's complaint that "airlines have traditionally viewed capacity reductions as a highly valuable way to artificially raise fares and boost profit margins."
The suits were eventually combined into a single case in Washington, D.C. Federal District Court. While Federal District Court Judge Colleen Kollar-Kotelly gave preliminary approval to Southwest's settlement Wednesday, the AP reported that consumers will have an opportunity to object before her order becomes final.
The DOJ sought documents from the airlines to determine whether they were conspiring to limit capacity to drive up prices. However, the department has yet to take any additional action.
In a 2015 statement, U.S. Travel Association President Roger Dow said the organization "fervently" hoped the airlines would be cleared of the allegations. "American consumers are already jaded enough about flying that we've been wondering for a while how many more gut-punches they could absorb before we see a dip in air travel demand," said Dow.
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