US: Southwest agrees to settle ‘capacity discipline’ antitrust class action suit

Southwest Airlines agreed to pay US$15 million to settle an antitrust lawsuit that charged the four largest US airlines with collusion.

The case, In re: Domestic Airline Travel Antitrust Litigation, claimed that American, Delta, Southwest and United airlines conspired to keep fares unnaturally high by keeping capacity low.

Southwest denied any wrongdoing but said it agreed to settle to avoid the expense of class action litigation, which could last for years.

The carrier also agreed to provide “significant cooperation to Plaintiffs in pursuing their case against the non-settling Defendants,” although a Southwest spokesman said requests for cooperation “will now be more limited and targeted.”

Judge Colleen Kollar-Kotelly of the US District Court of Washington DC gave preliminary approval to the settlement, which was reached over the course of three months of “hard-fought, arm’s length transactions,” according to court papers, and said the plaintiffs will be given an opportunity to object to the settlement.

The lawsuit was filed in 2015 at a time when the term “capacity discipline” was being bandied about by airline executives in earnings calls and conferences as the key to profitability.

Full Content: The New York Times

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