SAN FRANCISCO (CN) – Passengers claim the merger of Delta and Northwest Air Lines would reduce competition in and increase prices. The antitrust suit, filed by Delta and Northwest passengers, claims that the $17.7 billion all-stock merger of the third- and fifth-largest airlines in the country will make price fixing easier, and that the airlines have colluded in the past to fix fares, surcharges and cargo prices.
The merger, announced on April 14, would create the largest airline in the world, with almost one-quarter of the U.S. market, without including miles flown by “feeder” subsidiaries.
Plaintiffs say the airlines would use their market power to charge higher fares, reduce the number of flights, especially to smaller communities, and charge for services that used to be part of normal service.
Plaintiffs cite the airline industry’s bleak history when it comes to new airlines achieving success, with only Southwest and JetBlue achieving the feat in recent years, while many other airlines went out of business.
The plaintiffs want the merger blocked for violating the Clayton Antitrust Act.
They are represented by Joseph Alioto. The case will be heard by U.S. District Judge James Larson.