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US Justice Department probing airlines over price collusion

A United Airlines jet takes off from an airport at Ft. Lauderdale, Florida on February 21, 2013. (AFP photo)

The US Justice Department is investigating whether some of America’s biggest airlines have unlawfully colluded to keep airfares high and reduce their service. 

A spokeswoman for the Justice Department confirmed the probe, saying investigators are looking into “possible unlawful coordination” among some airlines.

"We are investigating possible unlawful coordination by some airlines," Emily Pierce said in a statement.

She declined to elaborate or identify the airlines being examined. The investigation began about two months ago, a person familiar with the matter said.

Several US media outlets reported on Wednesday that the collusion among major airlines involved limiting available seats to keep airfares high.

In recent years, US airlines have been consolidating through a series of mergers and cutting back on the number of planes flown, leading to less capacity and higher airfares even as demand for flights continues to rise.

They have eliminated unprofitable flights, filled a higher percentage of seats on planes and worked to slow growth in order to command higher airfares.

The US airlines' main trade association, Airlines for America, denied the charge.

"We are confident that the Justice Department will find what we know to be true," it said in a statement. "Our members compete vigorously every day, and the traveling public has been the beneficiary."

"It's hard to understand, with jet fuel prices dropping by 40 percent since last year, why ticket prices haven't followed," said Senator Charles Schumer, who called for the Justice Department to launch such an investigation in December.

"We know that when airlines merge, there's less price competition. What we need now is a top-to-bottom review to ensure consumers aren't being hurt by industry changes," the Democratic senator from New York said.

AHT/AGB


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