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Wed, Jun 20, 2018

American Airlines Agrees $45 Million Settlement In Passenger Class Action Suit

Accused Of Colluding With Other Airlines To Keep Fares High

American Airlines has agreed to pay $45 million to settle a lawsuit that accused the carrier of colluding with other airlines to limit seat capacity and keep fares high. The airline says that its decision to settle the suit is not an admission of guilt.

The Los Angeles Times reports that the passengers filed a total of 23 lawsuits that were consolidated in 2016 and brought before Federal Judge Colleen Kollar-Kotelly. The suits held that American, United, Southwest and Delta worked together to limit the number of seats available in an effort to boost fares while fuel costs fell.

The plaintiffs in the case cited comments from airline executives that talked in a similar way about "capacity discipline" during conferences and in earnings reports.

Southwest settled its portion of the suit in January for $15 million, but rejected the allegation of collusion between the airlines. American is also denying the allegations. In a statement, the carrier said that the settlement "does not include any admission of wrongdoing. The facts show that American dramatically increased domestic capacity during the period covered by the complaint while taking delivery of hundreds of new aircraft, giving it the youngest fleet of the U.S. network carriers.”

Like Southwest, American said that they were settling the suit to avoid lengthy and costly litigation. “So while it is difficult to agree to a settlement when we believe we’re right on the law and the facts, settling this case is a prudent decision for American,” the statement continued.

United and Delta have both released statements indicating they will continue to defend themselves against the charges.

(Image from file)

FMI: Original report

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