US Airlines Mergers 2015: Possible ‘Unlawful Coordination’ Is At Center Of Justice Department Investigation

Some U.S. airlines may have colluded to limit flights and deter competition in order to jack up domestic airfares following recent airline mergers, according to the Associated Press. The U.S. Justice Department has asked some airlines to provide information about seat capacity over the past two years as part of a probe into whether the carriers broke the law.

The investigation, which came to light Wednesday, appeared to be in its infancy and marked a turning point from the Justice Department’s 2013 decision to allow the merger of American Airlines and US Airways. It was unclear which airlines were under investigation, but federal prosecutors confirmed they were “investigating potential unlawful coordination among some airlines,” a Justice Department spokeswoman told the New York Times. Several airlines, including American Airlines, Delta Air Lines and United Airlines, confirmed to the AP that they had been contacted by the Justice Department.

Beginning in 2001, a series of airline mergers, prompted by bankruptcies, have shrunk the number of major U.S. carriers from 10 to four. As a result, America, Delta, Southwest and United now command more than 80 percent of the domestic travel market, the AP reported. Airfares have risen 13 percent since 2009, and airlines have made billions of dollars in reservation-change and new fees, meaning record profits.

"It's hard to understand, with jet fuel prices dropping by 40 percent since last year, why ticket prices haven't followed," said Sen. Chuck Schumer, D-N.Y., in a statement. Schumer called for federal prosecutors to launch such an investigation last year. "We know that when airlines merge, there's less price competition,” said Schumer. What we need now is a top-to-bottom review to ensure consumers aren't being hurt by industry changes."

The federal government tried to block the most recent merger -- that of American Airlines and US Airways in 2013 -- but ultimately allowed it to take place.

U.S. airlines denied the charges of collusion through their main trade group, Airlines for America. "We are confident that the Justice Department will find what we know to be true," the group said in a statement. "Our members compete vigorously every day, and the traveling public has been the beneficiary."