A U.S. federal judge has ruled that Delta Air Lines and United Airlines must face a class action lawsuit accusing them of colluding to increase domestic airfares by limiting the number of seats available. The passengers have provided sufficient circumstantial evidence of a conspiracy to reduce seating capacity, thereby increasing profits, according to U.S. District Judge Colleen Kollar-Kotelly.
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The airlines have openly practiced “capacity discipline” on domestic flights, resulting in reduced capacity and higher industry profits. American Airlines and Southwest Airlines, who were also defendants in the case, have already settled for $45 million and $15 million respectively, without admitting any wrongdoing.
The lawsuit was initiated in 2015 following an investigation by the U.S. Department of Justice into potential anti-competitive practices by airlines, even though no charges were filed. The passengers claim that the airlines’ enforcement of “capacity discipline” since 2009 has artificially inflated ticket prices and limited flight options. Delta and United argue that their reduction in seating capacity was a legitimate response to decreased demand, increased fuel costs, and the 2008 global financial crisis.
Both airlines had recently emerged from bankruptcy when the alleged conspiracy began, with United in 2006 and Delta in 2007. Delta has stated that it will continue to defend against the lawsuit, asserting that it has always independently determined its capacity based on market demand. United expressed disappointment with the judge’s decision and plans to seek reconsideration or file an appeal. The settlements with American and Southwest received final court approval in 2019, but payouts will not commence until the claims against Delta and United are resolved.