US: American agrees to US$45m settlement for collusion

 

American Airlines has agreed to pay US$45 million to settle a three-year-old lawsuit accusing four domestic carriers of collusion and antitrust practices, reported Bloomberg.

The suit claims American, Delta, Southwest and United illegally signaled to one other information about managing capacity in order to keep airfares elevated, despite stagnant demand and decreasing fuel costs.

A spokesperson for American, Matt Miller said the airline was admitting to no wrongdoing in settling the case, according to Bloomberg. “Despite our firm conviction in the appropriateness of our actions, costs to defend against antitrust litigation often run into the tens of millions of dollars,” Miller said. “So while it is difficult to agree to a settlement when we believe we were right on the law and the facts, settling this case is a prudent decision for American.”

The issue came to light in June 2015, when US Senator Richard Blumenthal (Democrat-Connecticut) filed a complaint with the Department of Justice, asking the agency to investigate anti-competitive behavior after the New York Times reported on a meeting of the International Air Transport Association, in which numerous airline executives used near-identical language when discussing their approach to a “disciplined capacity” strategy.

Full Content: Bloomberg

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