Sunday, July 12, 2015 - A set of lawsuits alleging that major American airlines colluded to artificially raise the price of airline tickets have requested consolidated into multidistrict litigation. The group of plaintiffs seeking the MDL will request that the Judicial Panel on Multidistrict Litigation centralize the claims before a federal judge in Illinois.
The number of lawsuits seeking to be combined into multidistrict litigation are not great, as there are currently as little as six lawsuits pending against the airlines, which includes industry giants such as Delta Air Lines Inc. and United Airlines Inc. The first of the lawsuits involved in those seeking an MDL was filed in New York on July first following a Department of Justice notice as to the antitrust activities of the airlines and a possible violation of the Sherman Act. Additional lawsuit were filed in Illinois.
The plaintiffs have claimed that those airlines, along with American Airlines, Inc. and and Southwest Airlines Co., conspired to artificially inflate the prices of airline tickets in the U.S. and also inhibit the capacity for flights occurring in the country. Boosts in airline revenue in the past year, aided by more than $3 billion added by both reservation changes and baggage fees, have been supplemented with a 2.5 percent increase in airline fares after they fell by nearly 2 percent in 2013. This sharp increase caught the attention of plaintiffs, who now claim that the rise in prices is due to antitrust behaviors by the airline industry.
The Department of Justice has indicated that it will be involved in the litigation pending against the airlines companies, which are known as the "Big Four", as it notified the defendants that it will take part in the lawsuits against the defendants. Their inquiry into the reason for the ticket price hikes led to the initial litigation filed against the airlines.
The plaintiffs claim that their separate lawsuits against the airline companies share common questions of fact that would allow them to benefit from a possible consolidation into multidistrict litigation. Their claims against the "Big Four," which control 80 percent of the airline industry, all allege anticompetitive behavior that resulted in the increase in airfare for consumers. The plaintiffs point out as well that the four major airlines named in the lawsuits have hubs in Chicago airports that could have been used as a site at which the collusion to raise prices took place.
The defendants have claimed in response to the allegations that their prices may seem high compared to airlines based abroad, which have their operations subsidized by the government. However, a series of airline consolidations since 2008 have created an environment where airlines do not have to compete as fiercely for business and can allegedly collude to maintain prices and suppress capacity in order to eliminate unprofitable flights.
The lawsuits filing a motion to consolidate have named the Northern District of Illinois as the federal court at which they wish their cases to be heard. This location would work as a convenient location as it is close to the Chicago airports where the defendants all have airline hubs.