The Department of Justice (DOJ) confirmed earlier this month that it is investigating whether airlines have been colluding to limit vacant seats in order to keep ticket prices high. The nation’s four main carriers — American Airlines, Delta Airlines, Southwest Airlines and United Airlines — all said that DOJ had asked them for copies of communications they have had with each other, Wall Street analysts and major investors in connection with passenger capacity; they will be cooperating with the antitrust probe, they said.
The airlines deny acting illegally. “Demand has been enabled by a robust and competitive marketplace in which capacity has been added and average fares have decreased…the last two years have presented an entirely new competitive landscape that has greatly benefited air travel consumers,” American told CNN.
The umbrella group for these airlines, Airlines for America, told NPR that it is “confident that the Justice Department will find what we know to be true: our members compete vigorously every day, and the traveling public has been the beneficiary.”
Travelers may not be counting their blessings, though, given frequent late flights, fares that have remained sky-high despite lower fuel prices and costly fees for baggage, seat selection and other routine elements of a trip.
And most consumers likely don’t know that it could become much harder for them to suss out the true price of a ticket if the airlines have their way. In 2014, the same airlines that received DOJ letters demanding documents lobbied in favor of a bill that would allow them to advertise prices as they see fit. The ironically-named Transparent Airfares Act would permit airlines to use base fares — preliminary prices excluding additional taxes and fees — in advertisements and solicitations. The airlines would be required to include the extra fees and total ticket costs separately only just before a final purchase is made. This essentially would reverse a Transportation Department requirement that full fares be advertised initially.
The bill, which was introduced by current House Transportation Committee Chairman Bill Shuster (R-Pa.) — the same lawmaker who, it was discovered in April, has been romantically involved with a top lobbyist at Airlines for America — passed the House in July 2014 (an action applauded by Airlines for America). Twenty-two of its 51 cosponsors (31 Republicans and 20 Democrats), including Shuster, counted the air transport industry among their top 20 contributors in the 2012 elections; in the 2014 midterms, that number jumped to 35.
Though a similar bill has not passed the Senate, it could be folded into a broader Federal Aviation Administration (FAA) reauthorization bill, which will be introduced in the House as early as September.
All of the airlines under investigation from DOJ lobbied for the legislation last year; all are big spenders when it comes to making their case in Washington. American, for instance, spent around $9 million lobbying on that bill and other measures in 2014. Airlines for America came in at more than $9.3 million. United spent over $2.7 million, while Delta laid out over $3.9 million and Southwest brought up the rear at more than $1.1 million.
Some of those airlines lobbied against a similarly named Senate bill — the Real Transparency in Airfares Act — that was introduced by Sen. Robert Menendez (D-N.J.) a few months before the House bill passed. Similar name, but contrary purpose: The Senate bill actually would have doubled the per-day maximum penalty for airlines that go against the federal rule that full fares be advertised, from $27,500 to $55,000.
Airlines for America called the legislation “an unnecessary bill creating a solution in search of a problem.” Besides the trade group, American Airlines and United each invested in lobbying against the provision, which attracted no other cosponsors.