Airlines under investigation for price collusion

The Department of Justice has launched an investigation into whether or not major airline companies conspired to keep ticket prices high. Subpoenas were sent out to several major airlines including United, American, Delta and Southwest.

How the airlines have coordinated isn’t immediately clear, but among the evidence that investigators is considering includes public comments by airline executives and industry analysts.

Airlines have cut costs over the years by boosting prices and slashing the number of seats available. This combination has led to planes being 83 percent full on average. This is up from 71 percent in 2001.

Although this investigation sounds like good to news for consumers, many experts say it will be difficult for the DOJ to prove collusion took place.

But even if the airlines appear to move in lockstep on prices and capacity changes, that does not prove they are conspiring, said Helen Becker, an airline analyst at Cowen and Company.

“Because of technology, everyone has perfect knowledge,” she said. “Airlines know when their competitors change prices.”

Best of luck to the DOJ. It would be nice to fly home for Christmas and still be able to buy groceries for the month.

[CNN] [Reuters] [The Guardian] [Image via Reuters]