Home Airlines American Airlines offers $45 million to settle fare-collusion case

American Airlines offers $45 million to settle fare-collusion case

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American Airlines Boeing 777-300ER

American Airlines has offered to pay $45 million to end its role in a long-running class-action lawsuit against several carriers, making the move to avoid what it feared could be costly litigation, not in an admission of guilt.

“Despite our firm conviction in the appropriateness of our actions, costs to defend against antitrust litigation often run into the tens of millions of dollars,” American said. “While it is difficult to agree to a settlement when we believe we’re right on the law and the facts, settling this case is a prudent decision for American.” The carrier added that it has “dramatically increased domestic capacity during the period covered by the complaint.”

Assuming the court accepts the agreement, the funds will be pooled into an award fund for plaintiffs, less legal fees and other costs. American also has agreed to provide some information to the plaintiffs’ counsel as part of the settlement, a June 15 court filing said.

The suit began in 2015 when several private cases were brought against Dallas/Fort Worth-based American, Atlanta-based Delta Air Lines, Dallas-based Southwest Airlines, and Chicago-based United Airlines alleging that they were working together as far back as 2009 to keep capacity artificially low—claims the carriers deny. The cases were prompted by a US Department of Justice (DOJ) investigation—a probe that was later dropped without any findings. More than 100 cases were eventually consolidated into a class-action lawsuit in the Washington DC federal district court.

The suit’s class includes anyone who purchased domestic tickets on one of the four carriers from July 2011 to present. The plaintiffs also want the defendants to pay for legal fees and other associated costs.

In October 2016, the court denied the airlines’ request to dismiss the case, noting that “it does not reach this holding lightly, particularly in light of the high cost of discovery in antitrust cases.”

Southwest this past December offered $15 million to settle its part of the suit, and the court accepted the deal in January. Like American, it has also agreed to cooperate with the plaintiffs’ legal team by providing certain information. Southwest underscored at the time that it “denies all allegations of wrongdoing.”

ATW

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