guv1976

Wirelessly posted (BlackBerry: BlackBerry8530/5.0.0.1030 Profile/MIDP-2.1 Configuration/CLDC-1.1 VendorID/417)

"But the subpoenas will come with demands of documentation which will require a warrant if the airlines refuse."

No. The subpoenaed entity can certainly go into court to try to quash the subpoena; it will be up to a judge to decide whether to quash or uphold the subpoena. If a judge upholds the subpoena and the subpoenaed party refuses to comply, contempt proceedings -- not search warrants -- would be the typical enforcement mechanism. If the subpoenaed entity simply ignores the subpoena, the government can go into court for enforcement.

Subpoenas are often utilized to garner sufficient evidence to make the case.

Yes, I expect that the government has some reason for suspecting collusion, but the government does not need probable cause for issuance of most subpoenas.

travelinmanS

It's not just choice, it's the price fixing, benefit fixing, all changing to revenue based FF programs at the same time, ect. It's not good for consumers or the broader economy to have an oligopoly acting in unison no matter how many places that oligopoly can take you.

JDiver

as this isn't specific to any specific airline, we'll send it to TravelBuzz for broader discussion.

JDiver
Senior Moderator

invisible

Google 'southwest commercials 1970'

emcampbe

I doubt anything will come of this. Justice department will simply say they've looked into the matter.

Yes, there have been mergers that have reduced competition and yes, fares have gone up while benefits have been reduced for frequent flyers. Yes, airlines tend to copy each other on capacity, match benefits, etc.

But none of this makes collusion. For collusion, two or more players have to be acting together. One carrier matching the price of another is not collusion. It has to be something like one CEO sitting down with another and agreeing to it, or agreeing to capacity declines, agreeing to take actions together to keep others out of the market, etc.

So as much as consumers may generally hate the bigger airlines and the power that comes with them, doubt in the end his will amount to much.

Hengilas

Sure, but they weren't nearly the force that they are now

us2

The whole point of collusion by an oligopoly is to keep prices and profits higher than they ordinarily be by restricting supply. While you may have consumer choice in suppliers, the price paid by the consumer is higher than it should be.

Four carriers (AA, UA, DL and WN) control 80% of the US domestic market. While there exists in theory the ability of new carriers to enter the market, the huge fixed costs and restricted slots at some key airports make that a more theoretical than realistic possibility.

Madone59

The lose of choice has been at the majority of airports - those that serve small cities or regional carriers only to feed into larger hubs. A city like ROC (my home town) for example used to have up to 5 legacy airlines (UA, CO, DL, US, AA) with their various perks and individual attraction for a traveler. Now there can be no more then 3 and while the same routes may still be flown that contraction has reduced a travelers options as well reduced competition between airlines.

Example: If I had to get from SAN to ROC to see family I could connect in EWR/CLE on CO or IAD/ORD on UA. United and Continental would be conscious of each-others pricing for ROC as well as similar destinations. Now UA controls all of those routes (and has canceled CLE) and less competiton for my business.

I agree there is more to the DOJ investigation like travelinmanS mentioned but the reduction in the number of carriers that serve smaller cities is something that was personally bothersome.

flyingmusicianlax

I should amend the word "cut" to "control." Nevertheless, the DOJ has only to prove that the airlines have been colluding to control capacity. As I stated before: each airline is allowed to control its own capacity, but it cannot collude with other airlines so as to affect the capacity of the overall market.

airplanegod

I don't think anything will come out of this. Although, I don't think anyone would be opposed to splitting up UA/CO again, they are still practicly two seperate companies

I do agree with one of the above posters, as a result of various mergers, small/medium airports have taken a hit. For example, with the WN/FL merger, FL used to serve HPN-ATL and HPN-MCO, along with a couple of other airlines. When WN pulled all FL flights out of HPN and abandoned the market, HPN-ATL prices rose because Delta is now the only carrier on that route and the prices rose on HPN-MCO because JetBlue is now the only carrier on that route.

Fanjet

So the airlines using capacity discipline is now illegal? And I'm not denying the claim that they are controlling capacity. I'm questioning the notion of the airlines "getting together in a back room" to make these decisions. When AA decided to dump its 762s and replace them with 321s on their JFK-LAX/SFO routes, there was a capacity decrease even though the frequencies increased. Do you think they got together with UA/DL/B6/VX to come up with that plan?

DenverBrian

Overheard on CNN today: Apparently, one episode that may have precipitated this was when Gary Kelly at WN stated that they'd be increasing capacity, and then hours or days later, was quoted as retracting that statement, saying he'd "gone rogue."

Tchiowa

That's right. Cutting capacity, controlling seats, setting prices, all that stuff is just fine. Colluding with your competitors is not.

BigLar

Right on!

Who wouldn't want to fly a plane piloted by some guy/gal who'd read the manual a couple of times and has well over a dozen hours in the air? What right does the government have to interfere with maximizing profits with some lame excuse like "public safety" or other socialist nonsense?

N830MH

Yes, it's illegal. Those people is complaining about a ticket pricing, bag fees and etc. Airlines is lied to all of those people. That's why they never telling the truth. DOJ is still more investigation against the airlines. I tried to pay a ticket to FLL and etc. There is no cheap price in a long time. Why they doing it?