Airline passengers have to endure a lot these days, from security checks that treat everyone like a criminal to ever more cramped seats to fees for checked bags, more legroom, snacks, drinks, headphones, etc., etc.
Finally some good news: The Justice Department is looking into allegations that airlines secretly colluded to jack up ticket prices.
Airlines have managed to soar above the financial clouds, with lower fuel prices, high demand for a dwindling supply of seats and those fees producing billions in profits.
Federal prosecutors have requested documents from the last two years related to statements and decisions airline officials have made about “limiting capacity on flight routes,” according to a report in the New York Times. “By making it harder for passengers to find seats, airlines could restrain competition and increase fares.”
Consider this remarkable figure: 80 percent of the nation’s air traffic is concentrated among just four airlines – American, United, Delta and Southwest. This near-monopoly is a recipe for anti-consumer cooperation.
The mergers creating a few very large airlines were supposed to create more options for customers on busy routes. The question for the Justice Department is whether that has happened, or whether “capacity discipline,” industry-speak for limiting flights, has been occurring.
Experts say investigators will determine whether airline executives have been communicating with each other and colluding privately. One analyst points to the natural animosity among chief executives as a reason to believe this may not have occurred, but “capacity discipline” is unlikely to happen in a vacuum.
Sen. Richard Blumenthal, D-Conn., called on the Justice Department to take bolder steps against airlines, pointing to the “surging profits as the industry has consolidated.” New York’s Democratic Sen. Charles E. Schumer, who had also called for a Justice Department investigation, raised his own red flag on mergers and the resulting lack of price competition.
Air travel has become an unpleasant experience on the best of days. Price gouging by airlines that have become immune to market pressures should not be adding to the pain. The results of the Justice Department investigation should prove enlightening.