WASHINGTON- A federal judge has issued an order directing Delta Air Lines (DL) and United Airlines (UA) to confront a consumer antitrust class action. This lawsuit accuses major U.S. carriers of colluding to increase domestic airfares by decreasing the number of available seats.
In a ruling handed down on Tuesday, U.S. District Judge Colleen Kollar-Kotelly, presiding in Washington, DC, noted that passengers had presented a “reasonable amount” of circumstantial evidence indicating a conspiracy aimed at reducing seating capacity, ultimately leading to higher profits.
Delta United Faces Airfare Lawsuit
Judge Kollar-Kotelly’s 70-page decision observed, “Defendants openly acknowledged and engaged in the practice of capacity discipline on domestic flights, resulting in reduced capacity and increased industry profits.”
American Airlines (AA) and Southwest Airlines (WN), two additional defendants in the case, had previously reached settlements, with American Airlines agreeing to pay $45 million and Southwest agreeing to pay $15 million, respectively.
It’s important to note that neither of these settlements involved an admission of wrongdoing.
This lawsuit was initiated in 2015, following the initiation of a Justice Department investigation into airlines regarding potential anticompetitive activities. The lawsuit has persisted despite the absence of any formal charges being filed.
Passengers involved in the case have alleged that a conspiracy, dating back to 2009 and described by the carriers as “capacity discipline,” artificially inflated ticket prices and restricted options for flights.
US Airlines Disappointed with Judgement
Delta and United Airlines have characterized their reductions in seating capacity as a legitimate response to multiple factors, including diminished demand, escalating fuel costs, and the global financial crisis of 2008. United even characterized it as a matter of “perfectly rational Economics 101.”
Both airlines had previously gone through bankruptcy proceedings shortly before the alleged conspiracy began, with United emerging from bankruptcy in 2006 and Delta in 2007.
In a statement on Wednesday, Delta expressed its commitment to defending itself against the lawsuit and emphasized that it has always independently determined its seating capacity based on market demand.
On the other hand, United expressed disappointment with the judge’s decision and stated its intent to either seek reconsideration of the decision or file an appeal.
Notably, the settlements reached with American and Southwest Airlines received final court approval in 2019, but payouts will not commence until the claims against Delta and United are resolved.
Stay tuned with us. Further, follow us on social media for the latest updates.