Southwest Airlines Agrees to $15M Ticket Price-Fixing Settlement

Southwest Airlines has reached a $15 million settlement resolving claims that it conspired with other airlines to raise ticket prices.

Plaintiffs in the multidistrict litigation involving several major airlines submitted the proposed Southwest Airlines settlement for court approval on Dec. 29.

The settlement would resolve claims that Southwest Airlines conspired with co-defendants Delta, United and American Airlines to restrict domestic flight capacity and increase the price of domestic airfares.

In addition to paying the settlement fund, Southwest Airlines also agrees to cooperate in the continuing litigation against the other defendant airlines. The company will also provide access to its higher-level executives and a full accounting of relevant facts within Southwest Airlines’ possession.

Plaintiffs began filing these airline price fixing class action lawsuits in July 2015, then requested they be consolidated into a single price-fixing MDL.

According to the plaintiffs, the four defendant airlines agreed in 2009 to increase the prices of domestic airfares by restricting the availability of domestic flights. Leveraging the four airlines’ 80 percent market share, and with the help of lower fuel prices and higher baggage fees, the alleged conspiracy helped the defendants bank combined profits of $21.7 billion in 2015, according to the plaintiffs.

The plaintiffs’ request for consolidation was granted in October 2015, transferring all relevant cases to a federal court in the District of Columbia. More than 100 individual airline antitrust lawsuits were eventually consolidated into the MDL.

The airlines filed a joint motion for dismissal in May 2016, arguing the plaintiffs failed to allege facts sufficient to establish a conspiracy. Southwest Airlines filed its own separate motion arguing that it uses a fundamentally different business model from the other defendants and that it competes with them aggressively.

Both motions for dismissal were denied in October 2016. U.S. District Judge Colleen Kollar-Kotelly noted that the plaintiffs are not required to offer direct evidence of a conspiracy at the pleading stage. Allegations of “parallel conduct” on the defendants’ part coupled with circumstantial evidence may be sufficient to raise a plausible claim for conspiracy, the judge said.

The antitrust allegations are also the subject of an investigation by the U.S. Department of Justice.

If the court approves the settlement as proposed, members of the proposed settlement Class will include all persons who purchased flights within the U.S., its territories and the District of Columbia from Southwest Airlines between July 1, 2011 and Dec. 20, 2017.

Top Class Actions will post updates to this class action settlement as they become available. For the latest updates, keep checking TopClassActions.com or sign up for our free newsletter. You can also receive notifications when this article is updated by using your free Top Class Actions account and clicking the “Follow Article” button at the top of the post.

The plaintiffs are represented by co-lead interim class counsel Michael Hausfeld, Jeannine Kenney, Michael P. Lehmann, Hilary K. Scherrer and Bonny E. Sweeney of Hausfeld LLP, and by Steven N. Williams, Elizabeth Tran and Adam J. Zapala 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 June 15, 2018, American Airlines agreed to pay $45 million to settle the price-fixing claims against them.

UPDATE 2: 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.