|
 The Justice Department wrote to major U.S. air carriers demanding
that they detail decisions to limit the number of seats they offer,
and what they've said about those plans to investors, securities
analysts and the public.
Airlines contacted have been asked to provide “available seat miles
on a regional and system wide basis” back to January 2010 and a raft
of other data.
The top four U.S. carriers American Airlines Group Inc, Delta Air
Lines Inc United Continental Holdings Inc and Southwest
Airlines Co control some 80 percent of the domestic air travel
market.
The four confirmed receipt of the regulator's letter and said they
are cooperating fully with the investigation. News of the probe sent
the Dow Jones U.S. airlines index down 2 percent.
Shares of the U.S. carriers have gyrated in recent weeks as
investors questioned whether they were planning to add capacity at a
pace faster than overall economic growth, which could put downward
pressure on fares.
Southwest fueled investor jitters about declining profit margins in
May when it unveiled plans to boost capacity by as much as 8 percent
this year from 2014, although it later revised the expected increase
to 7 percent.
But carriers have started taking flights off their fall schedules
and postponing aircraft deliveries in response to Wall Street
concerns that adding more flights and seats could erode fares and
margins.
Mergers, new fees imposed on passengers and caution about adding
capacity have boosted U.S. airline earnings after a decade of
bankruptcies following the September 11, 2001 attacks. In the past
year, tumbling oil prices have helped the carriers post
billion-dollar profits.
The probe focusing on whether the top U.S. carriers are colluding
domestically comes as some of the same airlines complain that
foreign rivals are competing unfairly on some overseas routes.
U.S. carriers have asked the Obama administration to freeze access
to U.S. airports by three Gulf airlines for allegedly receiving
state subsidies. The Gulf airlines deny that they have received
subsidies in violation of trade agreements.
[to top of second column] |
The U.S. airlines also have fought plans by low-cost Norwegian Air
Shuttle ASA to expand its U.S. flights under an Irish subsidiary,
with claims that it will undermine wages and working standards.
Consumer advocates and some lawmakers praised the Justice department
action focusing on domestic fares.
"This investigation must be tireless and timely to save consumers
from the onslaught of price increases in summer fares," U.S. Senator
Richard Blumenthal said in a statement.
The airlines and their defenders say ticket prices have fallen in
2015 while capacity this summer has reached a post-recession high.
"Our members compete vigorously every day, and the traveling public
has been the beneficiary," trade group Airlines for America said in
a statement Wednesday.
Separately, Connecticut's attorney general sent letters to the four
carriers last week asking whether they have coordinated prices,
citing recent statements at an industry conference held last month
in Miami.
(Reporting by Diane Bartz and Jeffrey Dastin; Editing by Sandra
Maler and Christian Plumb)
[© 2015 Thomson Reuters. All rights
reserved.] Copyright 2015 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
