American Airlines has won another victory in its four-year-long fight against a federal price-fixing suit that had become a test of contemporary antitrust enforcement.
At the start of the Independence Day holiday, a federal appeals court in Denver upheld a lower court decision that vindicated the airline. American Antitrust Institute director Bert Foer lamented the decision: "It marks the death of predatory pricing as a critical antitrust tool in this political climate".
A lower court judge in Wichita, Kansas, J Thomas Marten, had summarily rejected the case, ruling that the method that the Justice Department used to demonstrate predatory pricing was flawed. Marten also held that: "American may be a difficult, vigorous, even brutal competitor, but here it engaged only in bare, not brass-knuckle, competition."
But Foer insisted that American's planning documents that were at evidence in the case showed a clear intent to price below cost. American attorney Gary Kennedy said the airline had behaved properly from the beginning.
In 1999, then Attorney General Janet Reno charged American with a "calculated strategy" of driving three smaller competitors off newly established routes to and from its Dallas/Fort Worth hub. The three - Vanguard, Western Pacific and SunJet - are all now defunct.
Source: Airline Business
