‘Big Four’ Airlines Lose Dismissal Bid in Price-Fixing MDL

Top Class Actions’s website and social media posts use affiliate links. If you make a purchase using such links, we may receive a commission, but it will not result in any additional charges to you. Please review our Affiliate Link Disclosure for more information.

Four of the largest airlines in the U.S. lost their bid to dismiss a nationwide antitrust litigation alleging they conspired to fix ticket prices by artificially limiting the number of seats available for travelers.

U.S. District Court Judge Colleen Kollar-Kotelly rejected American, Delta, Southwest and United Continental Airlines’ motion to dismiss the class action lawsuit Friday, stating that she could “reasonably infer the existence of a conspiracy,” among the airlines to fix prices.

However, Judge Kollar-Kotelly did not rule on the merits of the proposed class action lawsuit, which is a consolidation of 105 lawsuits filed across the country against the “big four” airlines and seeks triple damages.

In October, these lawsuits were grouped together by the Judicial Panel on Multidistrict Litigation. Plaintiffs had pushed for consolidated of the price-fixing cases to Illinois federal court since one of the initial lawsuits over price-fixing allegations was filed there.

However, the JPML transferred the cases to Washington D.C. federal court under Judge Kollar-Kotelly, determining that all of the actions share factual questions arising out of allegations of a conspiracy by the airlines to fix prices for domestic tickets by keeping flight capacity artificially low.

The airlines have a collective market share of approximately 80 percent, according to court documents.

Plaintiffs in the airline price-fixing lawsuit allege that the price-fixing conspiracy started in early 2009 and has led to significantly higher ticket prices and fewer flight options.

The claims that the scheme, combined with low fuel prices and higher baggage check fees has allowed the four airlines to generate a combined $21.7 billion profit in 2015.

In their motion to dismiss, the four airlines told the court the case should be tossed on grounds that the plaintiffs failed to show proof of an agreement to scheme and collude to reduce seat capacity or that they reduced capacity in tandem.

But in her 41-page ruling, Judge Kollar-Kotelly referenced statements made by several airline executives about the need for “discipline” in seating capacity.

“Plaintiffs are not required to plead direct evidence of a conspiracy,” Judge Kollar-Kotelly noted. “Rather, plaintiffs may allege parallel conduct on the part of defendants coupled with circumstantial evidence sufficient to demonstrate a plausible antitrust conspiracy claim.”

The judge went on to state that “Starting in 2009, the industry experienced limited capacity growth,” the judge wrote. “Notably, as defendants’ executives acknowledged, this restriction on growing capacity was a marked change within the industry. The court is satisfied that at this stage, plaintiffs sufficiently pled parallel conduct.”

Last year, the U.S. Department of Justice launched a probe into the potential price-fixing conspiracy among the four airlines following complaints from travelers about increased prices and fewer options, which according to government data allowed the airlines to hold a nearly 69 percent domestic market share.

The plaintiffs are represented by co-lead interim class counsel Michael Hausfeld, Hilary K. Scherrer, Jeannine Kenney, Michael P. Lehmann and Bonny E. Sweeney of Hausfeld LLP and Steven N. Williams, Adam J. Zapala and Elizabeth Tran of Cotchett Pitre & McCarthy LLP.

The Airline Price-Fixing Class Action Lawsuit is In re: Domestic Airline Travel Antitrust Litigation, Case No. 1:15-mc-01404, in the U.S. District Court for the District of Columbia.

UPDATE: On Dec. 29, 2017, Southwest Airlines reached a $15 million settlement resolving claims that it conspired with other airlines to raise ticket prices.

UPDATE 2: On June 15, 2018, American Airlines agreed to pay $45 million to settle the price-fixing claims against them.

UPDATE 3: March 2019, a website has been established for consumers who purchased a domestic airline ticket on American, Delta, Southwest, United, Continental, or US Airways to find out about a pending class action lawsuit. Click here to learn more.