A class-action lawsuit against Southwest Airline just came to a close, thanks to a federal judge approving a $15 million settlement. The lawsuit itself stemmed from accusations that Southwest, “along with three other airlines, conspired to limit the number of seats available to customers and keep ticket prices high.” According to the lawsuit the “conspiracy began in 2009,” and since then, “the cost of airfare with Southwest, American, Delta and United — which plaintiffs claimed collectively controls about 80 percent of domestic passenger seats — rose substantially compared to those of other domestic air carriers, despite stagnant or decreasing demand and declines in the cost of jet fuel.” As a result of the pricing conspiracy, the lawsuit accused Southwest and the other airlines of violating federal antitrust laws and said, “Passengers have been injured by paying higher airfares and facing reduced flight choices.”
A class-action lawsuit against Southwest Airlines just came to a close, thanks to a federal judge approving a $15 million settlement. The lawsuit itself stemmed from accusations that Southwest, “along with three other airlines, conspired to limit the number of seats available to customers and keep ticket prices high.” According to the lawsuit the “conspiracy began in 2009,” and since then, “the cost of airfare with Southwest, American, Delta and United — which plaintiffs claimed collectively controls about 80 percent of domestic passenger seats — rose substantially compared to those of other domestic air carriers, despite stagnant or decreasing demand and declines in the cost of jet fuel.” As a result of the pricing conspiracy, the lawsuit accused Southwest and the other airlines of violating federal antitrust laws and said, “Passengers have been injured by paying higher airfares and facing reduced flight choices.”
While it agreed to settle the lawsuit against it, Southwest issued a statement saying “the settlement does not constitute any admission of wrongdoing,” and “denied having entered into any unlawful agreements with its competitors.” The other airlines named in the suit were American Airlines, Delta Air Lines and United Airlines, all of which have also “denied doing anything illegal.”
Despite denying the accusations, in agreeing to a settlement Southwest will be expected to “make the $15 million cash payment and also to provide what court documents called extensive cooperation.” What does the court mean by extensive cooperation? Well, according to court documents, extensive cooperation means Southwest will have to provide a “full account of facts relevant to the plaintiffs’ case,” and will have to hold “a series of informational meetings and interviews with industry experts and Southwest employees facilitated by the company.”
When discussing the matter, a Southwest representative said:
“We’re entering into this settlement to avoid considerable distraction and expense of protracted class-action litigation. For decades, we have consistently set our capacity planning with a goal of offering our lowest fares.”
For the time being, it doesn’t look like the other airlines will budge or agree to similar settlements. In fact, American Airlines even said the recent Southwest settlement “had not changed its position,” and issued the following statement: “We will continue to defend against the claims which we believe are without merit.” United Airlines issued a very similar statement, and Delta argued that “it had not engaged in any illegal behavior,” adding, “The assertion that our success is due to anything more than the hard work of our people is not only ridiculous, it is offensive.”
Sources:
Southwest Airlines Settles Suit but Denies Colluding to Keep Ticket Prices High
Southwest Airlines to pay $15 million to settle price collusion lawsuit
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