Are airlines colluding to jack up prices on customers? The government is investigating…

Are airlines colluding to jack up prices on customers? The government is investigating…

The Justice Department is trying to prove that there is collusion going on in the airline industry -- but they have a big hill to climb.

The Justice Department is investigating charges of widespread collusion within the airline industry, but experts think that the government may have a tough time proving its case.

It’s not uncommon for airlines to increase flights because of demand, and sometimes routes are eliminated because of a lack of demand — but are airlines working together to limit flights and increase fares? That’s what the Justice Department is trying to prove, according to an Associated Press report.

The government is in the early stages of an investigation, sending letters to the big carriers — Delta, Southwest, American Airlines, and United. The airlines generally won’t talk about prcicing decisions, although they have talked a little bit more about their practices for keeping their passenger capacity for individual flights at a high level. By keeping the capacity high, airplanes have been more full and therefore carriers can jack up the prices of tickets, leading to more profits.

It’s not unusual or illegal to match supply to demand, but were airlines basically agreeing to note compete as much in order to keep profits high? The government is trying to demonstrate that that is the case, although that will probably be tough to do.

The investigation is in its very early stages, so it’s tough to say, but if the government is able to find evidence of collusion, it could get airlines to agree to a consent decree to stop them from engaging in that behavior, and maybe even force them to issue public statements on what they intend to achieve as far as capacity.

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