Airlines Sued Over Multi-City Fares

A group of airline passengers and travel agents have filed an antitrust lawsuit against American, Delta, and United airlines, alleging they conspired to raise multi-city fares, “thereby causing consumers to pay hundreds and even thousands of dollars more for exactly the same flights.” 

The lawsuit also names ATPCO, the company through which airlines file fares for distribution to GDSs and other third parties, saying it “aided and abetted” the alleged conspiracy. ATPCO, an airline-owned company, is frequently named as a defendant in price-fixing lawsuits. 

“The intent, purpose and effect of the conspiracy was and is to fix, raise, maintain, and or stabilize prices for air passenger transportation services on multi-city trips within the United States” in violation of the Sherman Antitrust Act and the California Cartwright Antitrust Act, the complaint says. 

The airline defendants “each announced their agreement in substantially identical terms in written notifications given to members of the travel agency industry,” including some of the plaintiffs. 

The complaint accuses the airlines of agreeing to eliminate the “combinability” of lower, nonrefundable, one-way fares on multi-city trips, resulting in total fares of “up to ten times the cost of the combined one-way fares.” It says they agreed to prohibit passengers and travel agents, including the plaintiffs, from buying separate legs of multi-city air travel.  

The lawsuit also alleges that the airlines “threatened travel agents, including Plaintiffs, who fail to charge the new, higher, fixed air fares for multi-city travel that they would receive ‘debit memos’ ” requiring them to pay the difference between the lower per-leg prices and the “new, higher, fixed prices.” 

The lawsuit was filed in U.S. District Court in San Francisco by Joseph M. Alioto, who previously has filed antitrust lawsuits attempting to block the Delta-Northwest, United-Continental, American-US Airways and Southwest-AirTran mergers. 

In all the lawsuits, including the latest, the lists of plaintiffs are nearly identical.  

The multi-city fare issue has been a hot topic since it came to light in late March. 

ASTA has said it is monitoring the situation, and its staff has spoken with senior officials at the Department of Transportation about the issue.  

In recent days, the airlines softened some of the impact of the new fare rules, but agents say the changes have resulted in a confusing patchwork of fares.