Southwest paying $15 million in airfare collusion settlement
DALLAS - Southwest Airlines (LUV) will pay $15 million to settle class actions that accuse the four biggest U.S. carriers of conspiring to boost prices by holding down the supply of tickets for sale.
Southwest denies breaking the law but said it settled to avoid the expense of more litigation. It will also provide information to the plaintiffs.
American (AAL), United (UAL) and Delta (DAL) said Thursday they did nothing wrong and will continue to defend themselves.
Lawyers for consumers filed dozens of lawsuits against the four airlines in mid-2015 after The Associated Press first reported that the Justice Department was investigating possible collusion.
Federal officials demanded documents from the airlines -- which control more than 80 percent of the U.S. air-travel market -- to see if they were colluding to limit the number of seats in order to keep prices high.
The Justice Department hasn't taken any formal action against the carriers. The agency did not immediately respond to a request for comment.
Consumer groups complained that a series of airline mergers that began in 2008 reduced competition and led to higher fares. They claimed that through back and forth comments about the need for "capacity discipline," leaders of the biggest airlines pressured each other to limit seats, making them scarce and driving up prices.
Private lawsuits filed around the country were combined in a single case in federal district court in Washington, D.C. Southwest started discussing a settlement in September and reached an agreement with plaintiffs' lawyers in late December, according to court documents.
Federal District Court Judge Colleen Kollar-Kotelly gave preliminary approval to the deal Wednesday. Air travelers will get a chance to object before her order is made final.
Southwest spokesman Chris Mainz said, "these cases can go on for years," and settling will avoid "the considerable time, expense, and inconvenience" of continued litigation.
Southwest, the smallest of the four airlines involved, agreed to provide information and make executives available to talk with lawyers for the consumers who sued.
Representatives for the other three airlines said Southwest's settlement would not affect their defenses.
"We will continue to defend against the claims, which we believe are without merit," said American Airlines spokesman Matt Miller.
