Ramon Lopez/WASHINGTON DC
American Airlines promises to mount a vigorous defence against US Department of Justice (DoJ) allegations that it practised predatory behaviour to drive out start-up airlines at its Dallas/Fort Worth hub (Flight International, 19-25 May).
The civil lawsuit against American is the first to follow a two-year DoJ probe. It is the first major anti-trust case against an airline since deregulation in 1978. Joel Klein, head of the DoJ's anti-trust division, hints that more could follow.
Darryl Jenkins, executive director of the Aviation Institute at George Washington University in New York, says federal anti-trust law would have to be rewritten for the DoJ to win. He favours a court settlement and predicts the DoJ "will have a tough time" proving its case since it is difficult to prove predatory pricing.
"The DoJ wants to build a protected class. This is social engineering," he says.
Vanguard Airlines, which the DoJ says was driven out of Dallas/Fort Worth, says the legal challenge "will help preserve open competition throughout the industry and help consumers and new entrant airlines alike". Allan McArtor, Legend Airlines' chief executive, says the DoJ's action will keep major US air carriers from running roughshod over new entrants.
The US Department of Transportation is yet to consider allegations of predatory pricing made by AccessAir against Trans World Airlines, Delta Air Lines and Northwest Airlines; ValuJet, now AirTran, against Delta; and Frontier Airlines against United Airlines at Denver International.
United is keeping a close eye on the American suit and hopes the DoJ will stay with legal precedent on predatory pricing. Continental say the lawsuit is groundless and the work of idle government hands.
Source: Flight International