Southwest Airlines to Pay $15 Million to Settle Collusion Claims

Southwest Airlines aircraft (Bob Abbott/Wikipedia)

DALLAS (CN) – Southwest Airlines will pay $15 million to settle class action lawsuits claiming it conspired with Delta, United and American Airlines to keep ticket prices high by limiting capacity.

The Dallas-based airline denies it broke the law but said it is settling to avoid the cost of more litigation, The Associated Press reported. Southwest did not immediately respond to an email message Thursday afternoon requesting comment. American and United said Thursday they would continue to defend against the lawsuits, which were filed against the airlines in 2015.

The Department of Justice has requested documents from the airlines to investigate possible collusion, but has yet to take any further action.

In an antitrust lawsuit filed in Milwaukee Federal Court in July 2015, the plaintiffs claim the defendants control over 80 percent of seats in the domestic travel market.

“During that period, they have eliminated unprofitable flights, filled a higher percentage of seats on planes and made a very public effort to slow growth in order to command higher airfares,” the complaint stated.

The plaintiffs claim the term “discipline” – an alleged euphemism for limiting flights and seats, higher prices and bigger profit margin – was repeatedly used by airline executives at the annual International Air Transport Association conference that year.

They further claim Delta’s removal of schedule and fare information from third-party websites “is a part of a broader push by defendants to restrict how – and whether – sites can use their fare and schedule data” to limit consumers’ ability to do price comparisons.

Southwest says the settlement is not an admission of wrongdoing and it continues to deny it entered into “any unlawful agreements” with other airlines.

“We’re entering into this settlement to avoid considerable distraction and expense of protracted class-action litigation,” Southwest said in a statement Thursday. “For decades, we have consistently set our capacity planning with a goal of offering our lowest fares to the hundreds of millions of Customers of America’s largest and original low fare airline.”

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