$10 rise in fare
might be illegal
NEW YORK >> The Justice Department is scrutinizing the $10-per-round-trip fare increases made by the nation's largest airlines to determine whether carriers violated an antitrust ruling enacted nearly a decade ago.
At issue is the way in which airlines make fare changes that do not affect immediate travel, raising the possibility that they could signal future pricing plans to competitors.
"We are looking into it," Gina Talamona, a spokeswoman at the department's antitrust division, said yesterday.
American Airlines raised nonsale fares on its North American routes Thursday by $10 per round trip starting June 1. United matched the increase the next day, and eight other carriers had fallen in line by late yesterday.
The industry raised fares in anticipation of the government's upcoming four-month suspension of security fees, which amount to $2.50 per flight segment, maxing out at $10 per round trip.
"Airlines were faced with two choices: give consumers up to a $10 round-trip break or raise fares," said Jamie Baker, J.P. Morgan's airline analyst. "Not surprisingly, the industry chose the latter."