San Francisco attorney Joseph Alioto says it began on April 1st. On that day, he told
CBS 5's Consumer Watch, United, American, and Delta airlines changed a policy that automatically charged the lowest fares on each leg of multi-leg flights.
Consider two one-way flights, the first from Los Angeles to Houston, the second from Houston to New Orleans. Together they once cost $189. Now, the two flights must be booked as one ticket, at a price of $363.
“It’s price fixing,” Alioto told the news channel. Even the language the three airlines used, Alioto remarks, was basically the same.
Working together, the attorney alleges, the three companies were able to make a change benefitting them all that no single one of them could have made individually. "They discovered that some legs were so low because those were in areas in which they were competing with low cost carriers,” he said. Alioto has filed a lawsuit on behalf of travel agents, but American called it “completely without merit."
Well, it looks like he may have been onto some collusion amongst the airlines, which is not a new accusation. As CNN reported, the Department of Justice last July sent subpoenas to at least United, American, and Southwest Airlines. Specifically, CNN writes that the "possible unlawful coordination" has to do with limiting capacity increases, artificially diminishing supply.
"We welcome the review," a spokesperson for American said at the time. "Demand has been enabled by a robust and competitive marketplace in which capacity has been added and average fares have decreased."
As major airline mergers take place and airlines such as Virgin are sold — that one went to Alaska Airlines — Travel Association President and CEO Roger Dow has expressed his concern.
"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. 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," Dow said in a statement.
Previously: [Update] Virgin America Sold To Alaska Airlines