Collusion probe targets airlines

The U.S. Justice Department is investigating possible collusion among major airlines to limit capacity, or available seats, in an effort to keep airfares high.

American Airlines, which operates a hub with 460 daily flights at Philadelphia International Airport, Delta Air Lines, United Airlines, and Southwest Airlines each confirmed receiving a letter from the Justice Department in connection with the agency's antitrust probe. All said they were cooperating.

Justice Department spokeswoman Emily Pierce on Wednesday acknowledged an investigation into "possible unlawful coordination by some airlines," but declined to identify the carriers.

"We fervently hope that the U.S. airlines targeted by the Justice Department's inquiry are cleared of these allegations," said Roger Dow, U.S. Travel Association president and CEO.

After a string of airline mergers, American, Delta, United, and Southwest control the largest share of U.S. commercial air service.

"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," Dow said. "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."

The average domestic airfare is not much higher, when adjusted for inflation, although it depends on the route, said George Hobica, founder of airfarewatchdog.com.

"There are so many bargains out of Philadelphia now, with Southwest and Frontier flying from Philadelphia," Hobica said. "We saw a fare from Philly to Miami recently for $120 round-trip nonstop. There is competition out there.

"It's not just the major airlines - it's Spirit, it's Frontier. JetBlue is expanding," Hobica said. "There's no such thing as an average airfare. It depends on where you are going, and when you are going, and when you buy the ticket."

American said Wednesday that it received a "civil investigative demand" letter from antitrust regulators, seeking documents and information from the last two years "related to statements and decisions about airline capacity."

"We welcome the review as the data shows that the industry remains highly competitive with more people flying than ever before," American said in a statement.

The marketplace is "robust and competitive" with added seat capacity, and "average fares have decreased," American said. "The last two years have presented an entirely new competitive landscape that has greatly benefited air travel consumers."

Since 2008, there have been four big airline mergers: Delta and Northwest; United and Continental; Southwest and AirTran, and American and US Airways.

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