Domestic Airline Lawsuit
American Airlines, Inc., Southwest Airlines Co., United Airlines, Inc., and Delta Air Lines, Inc., faced a class action lawsuit that claims that the defendants conspired to increase the prices of domestic tickets by limiting capacity on domestic flights. Flight ticket prices continued to rise despite the fact that other costs were lowering. As a result, the defendants generated more than $21 billion in profit at the expense of unknowing consumers.
3 Airlines Face Class Action Lawsuit
The passengers allege that the collusion among these Airlines began in 2009. If you purchased a domestic airline ticket on any of the defendants between July 1, 2011 and June 14, 2018, you can register on the website created for class members to get updates and more information about the class action lawsuit. Southwest and American Airlines denied the allegations but agreed to settle to avoid litigation costs.
Details About The Defendants
American Airlines, Inc., Southwest Airlines Co., United Airlines, Inc., and Delta Air Lines, Inc., make up more than 80 percent of the Airlines industry. They are four of the largest commercial air passenger carriers in the United States. So filing a class action lawsuit against these airlines separately was always going to be a challenge. Plaintiffs asked for the suits to be consolidated for the following reasons:
- To prevent duplicative discovery and motion practice
- Avoid inconsistent rulings
- To conserve the resources of the courts and the litigants
More than 100 private lawsuits were combined in this domestic airline lawsuit, according to reports.
Settlements Have Been Reached
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In January 2018, Southwest Airlines Co. agreed to pay $15 million to settle the nationwide class action lawsuit brought against the company by passengers. You are entitled to benefit from this if purchased flights from Southwest Airlines between July 1, 2011 and December 20, 2017. American Airlines agreed to pay an even larger settlement of $45 million to resolve the claims against them in June 2018. American Airline’s settlement is a cash payment, which will provide a monetary benefit to class members, and also allows class members to recover the entire amount of damages against the non-settling defendants.
Understanding Price Fixing
When competitors agree amongst themselves verbally, in writing or in inferred conduct to lower, raise, or stabilize prices, or competitive terms, it is referred to as price fixing. Anti-trust laws require every company to establish prices and other terms on its own terms. The prices should be determined freely on the basis of supply and demand not on artificial situations created through an agreement among competitors. Price fixing is illegal whether it leads to lowering prices or stable prices. It is not just illegal when it involves prices but also when it involves other terms that can affect prices. These other terms include things such as discount programs, shipping fees, financing rates, or warranties. Competitors may face antitrust scrutiny when they make agreements on the following:
- Bids
- Costs
- Capacity
- Terms or conditions of sale, including credit terms
- Identity of customers
- R & D plans
- Production quotas
- Pricing policies
- Promotions
- Present or future prices
- Allocation of customers or sale areas
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