The U.S. Justice Department is investigating whether airlines are working together to artificially inflate airfares, according to multiple news reports this morning.
Airlines may have reduced the amount of seating available on some routes, increasing airfare prices and limiting competition, and are now reaping big profits, the department's investigation suggests.
Federal prosecutors have asked airlines for documents about their moves to limit capacity on flight routes. Major airlines told The New York Times that they are cooperating with the investigation but don't believe the market is anti-competitive.
The investigation is a sharp turn for the Justice Department, which in November 2013 approved a merger between US Airways and American Airlines, creating the largest airline company in the world. Just four carriers—Delta, Southwest, United and American—now control more than 80 percent of the market, a share that was spread out between 11 airlines a decade ago, the Times reported.
“This is a long time coming,” Diana Moss, president of the American Antitrust Institute, told the Washington Post. "It was in their joint interest to keep capacity tight and to keep prices high.”
Connecticut Senator Richard Blumenthal urged the Justice Department to investigate collusion last month.
“Consumers are paying sky-high fares and are trapped in an uncompetitive market with a history of collusive behavior," Blumenthal wrote in a letter to the department. "I urge you to use all the tools at your disposal to punish this anti-competitive and anti-consumer behavior."
In comments at the International Air Transport Association conference last month, some airline executives reminded their colleagues to remain "disciplined" about increasing passenger capacity, Blumenthal said.
Julia Medina, a spokeswoman for industry group Airlines for America, disputed that argument.
“It is customers who decide pricing, voting every day with their wallets on what they value and are willing to pay for,” Medina told the Post.
Casey Tolan is a National News Reporter for Fusion based in New York City.