American Airlines Settles Fare Collusion Lawsuit for $45 Million

Jun 16, 2018

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.

The fare collusion lawsuit against the four largest US-based airlines is heating up. After the airlines repeatedly failed to get the case thrown out, Southwest settled in January 2018 for $15 million — and agreed to cooperate with plaintiffs. Now, American Airlines is settling the case for $45 million with a similar required flip against the remaining airlines.

The lawsuit alleges that the airlines started colluding in 2009 to keep capacity artificially low in order to raise average fares. The case points to stagnant capacity growth and rising airfares in a time of falling oil prices in the period after this agreement.

This anti-trust case (In re Domestic Airline Travel Antitrust Litigation, 15-mc-1404, U.S. District Court, District of Columbia) is a combination of 105 separate cases brought by more than 150 plaintiffs. These cases were filed starting in 2015 after the Department of Justice began investigating similar fare collusion claims.

In a 2016 decision to reject the airlines’ request to throw out the case, the judge wrote:

Starting in 2009, the industry experienced limited capacity growth. Notably, as defendants’ executives acknowledged, this restriction on growing capacity was a marked change within the industry. The court is satisfied that at this stage, plaintiffs sufficiently pled parallel conduct.

In a statement, an American Airlines spokesperson points out that “costs to defend against antitrust litigation often run into the tens of millions of dollars.” During the multi-year suit, the airlines’ unsuccessful attempts to get the case thrown out has likely racked up this cost already. Depending on how many “tens of millions of dollars” the airline is referring to, it seems illogical to settle for $45 million when you’re sure you’d win while spending less.

As part of this settlement, American Airlines agrees to cooperate as the lawsuit continues against Delta and United — both of which maintain they’ve done nothing wrong.

In a statement to Bloomberg, Delta spokesman Morgan Durrant put the company’s stance bluntly: “The assertion that our success is due to anything but the hard work of our people is offensive.” Then again, Delta has been caught lying to the press in the past.

The escalating settlements — from Southwest’s $15 million to American’s $45 million — and both Southwest and AA’s requirement to cooperate indicate the plaintiffs are gaining increasing evidence against the remaining airlines.

Delta SkyMiles® Platinum American Express Card

Earn 90,000 bonus miles and 10,000 Medallion® Qualification Miles (MQMs) after you spend $3,000 in purchases on your new card in the first three months of card membership. Offer ends 11/10/2021.

With Status Boost™, earn 10,000 Medallion Qualification Miles (MQMs) after you spend $25,000 in purchases on your Card in a calendar year, up to two times per year getting you closer to Medallion Status. Earn 3X Miles on Delta purchases and purchases made directly with hotels, 2X Miles at restaurants and at U.S. supermarkets and earn 1X Mile on all other eligible purchases. Terms Apply.

Apply Now
More Things to Know
  • Limited Time Offer: Earn 90,000 Bonus Miles and 10,000 Medallion® Qualification Miles (MQMs) after you spend $3,000 in purchases on your new Card in your first 3 months. Offer expires 11/10/2021.
  • Earn up to 20,000 Medallion® Qualification Miles (MQMs) with Status Boost® per year. After you spend $25,000 in purchases on your Card in a calendar year, you can earn 10,000 MQMs two times per year, getting you closer to Medallion® Status. MQMs are used to determine Medallion® Status and are different than miles you earn toward flights.
  • Earn 3X Miles on Delta purchases and purchases made directly with hotels.
  • Earn 2X Miles at restaurants worldwide, including takeout and delivery and at U.S. supermarkets.
  • Earn 1X Miles on all other eligible purchases.
  • Receive a Domestic Main Cabin round-trip companion certificate each year upon renewal of your Card. *Payment of the government imposed taxes and fees of no more than $75 for roundtrip domestic flights (for itineraries with up to four flight segments) is required. Baggage charges and other restrictions apply. See terms and conditions for details.
  • Enjoy your first checked bag free on Delta flights.
  • Fee Credit for Global Entry or TSA Pre✓®.
  • Enjoy an exclusive rate of $39 per person per visit to enter the Delta Sky Club® for you and up to two guests when traveling on a Delta flight.
  • No Foreign Transaction Fees.
  • $250 Annual Fee.
  • Terms Apply.
  • See Rates & Fees
Regular APR
15.74%-24.74% Variable
Annual Fee
Balance Transfer Fee
Recommended Credit
Terms and restrictions apply. See rates & fees.

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.