Top Airlines Hit With Ticket Price-Fixing Class Action Lawsuit

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A class action lawsuit filed Wednesday claims that the top U.S. airline carriers, which control more than 80 percent of the domestic travel market, conspired with each other in order to keep airfare prices artificially high.

Lead plaintiffs Christopher Devivo, Jack Sniado and Julia Holt filed the airline ticket price-fixing class action lawsuit against Delta Airlines Inc., American Airlines Inc., Southwest Airlines Co., and United Airlines Inc. with allegations of illegally coordinating with each other in order to raise and maintain the prices of airline tickets using a number of signals.

The airline class action lawsuit was filed within hours of the U.S. Department of Justice announcing its investigation into the possibility of airline carriers illegally coordinating with each other. The DOJ has demanded copies of all communications that the airlines have had with each other in addition to any information exchanged with major shareholders and Wall Street analysts.

The plaintiffs allege that for years the capacity on domestic flights was flat. However, from January 2014 to January 2015, the airlines had an economic growth of 5.5 percent. According to the airline ticket price-fixing class action lawsuit, the growth occurred due to a calculated plan of eliminating flights, filling a higher amount of seats on planes and making a “very public effort to slow growth in order to command higher airfares.” The class action lawsuit claims that within the last two years, these U.S. airlines have earned a collective $19.7 billion.

Through airline industry meetings, the airline price-fixing class action lawsuit alleges that the companies acknowledged their commitment to conspire together, in a term they referred to as “discipline.” According to the plaintiffs, “discipline” is a euphemism for “limiting flights and seats, higher prices and fatter profit margins.” The class action lawsuit claims that Delta’s president Ed Bastian was quoted at the International Air Transport Association meeting in June 2015 as stating that Delta was “continuing with the discipline that the market place is expecting.”

Plaintiffs allege that Delta, Southwest, United and American Airlines violated the Sherman Act by artificially reducing or eliminating airfare competition in the United States. Due to these actions, the airline price-fixing class action lawsuit claims that the plaintiffs and potential Class Members paid more for airline tickets than they otherwise would have, if not for the illegal conduct on behalf of the defendants.

If approved, the airline price-fixing class action lawsuit would be open to Class Members who purchased a ticket directly from Delta, American Airlines, Southwest, and United Airlines from Jan. 1, 2010 to the present day. The plaintiffs do not know the exact amount of Class Members expected to join, but estimate that it will be sufficiently numerous and geographically dispersed throughout the United States.

The plaintiffs are represented by Barbara J. Hart, Christian Levis and Sung-Min Lee of Lowey Dannenberg Cohen & Hart, P.C.

The Airline Ticket Price-Fixing Class Action Lawsuit is Christopher Devivo, et al. v. Delta Airlines Inc., et al., Case No. 7:15-cv-05162, in the U.S. District Court for the Southern District of New York.

UPDATE: On Oct. 13, 2015, the U.S. Judicial Panel on Multidistrict Litigation transferred the airline price-fixing class action lawsuits to federal court in Washington D.C.