Southwest to Pay $15 Million in Price-Fixing Lawsuit
This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.
Southwest Airlines has agreed to pay $15 million to flyers who claim that the airline and three of its competitors illegally teamed up to keep airfares high. Despite the settlement, Southwest maintains that it’s innocent of the accusations.
Once a Washington, DC, federal judge gave her preliminary OK to the settlement agreement on Jan. 3, Southwest became the first of the four airlines named in the class-action suit to agree to cooperate with the plaintiffs against the others — Delta, American and United. Those three have also denied that they reduced the number of available seats in order to keep the prices of those seats artificially high.
A final approval is expected in a few months.
According to the plaintiffs, the airlines entered into a conspiracy in 2009, using their clout (together, they control about three-quarters of the domestic market) to gouge customers while offering them fewer choices in seats and routes. Airline executives allegedly couched their shared price-fixing strategy in terms like “capacity discipline.”
Southwest said in a statement that it only agreed to settle to “avoid considerable distraction and expense of protracted class-action litigation,” but the terms of the agreement mean that it will help the plaintiffs’ with their case against the remaining airlines, including letting key Southwest employees be interviewed and providing a “full account of facts.”
Spokespeople for American, Delta and United said the Southwest settlement didn’t affect their plans to fight the lawsuit.
Featured image courtesy of Robert Alexander/Getty Images.
WELCOME OFFER: 60,000 Points
TPG'S BONUS VALUATION*: $1,200
CARD HIGHLIGHTS: 2X points on all travel and dining, points transferrable to over a dozen travel partners
*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.
- Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 toward travel when you redeem through Chase Ultimate Rewards®
- 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
- Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 60,000 points are worth $750 toward travel
- Get unlimited deliveries with a $0 delivery fee and reduced service fees on orders over $12 for a minimum of one year on qualifying food purchases with DashPass, DoorDash's subscription service. Activate by 12/31/21.
- Earn 5X points on Lyft rides through March 2022. That’s 3X points in addition to the 2X points you already earn on travel.