Source: Obama DOJ won't push antitrust case against airlines

The Justice Department, which started investigating alleged collusion between the nation's major airlines in mid-2015, will not bring an antitrust case against the carriers before the Obama administration leaves office at the end of next week, according to a person familiar with the situation.

The civil investigation has not been closed, cautioned the person, who spoke on condition of anonymity because the Justice Department has not announced anything publicly.

Some airline executives believe that President-elect Donald Trump's administration will be friendlier to them than was President Barack Obama's administration, which briefly tried to block the American Airlines-US Airways merger on antitrust grounds and adopted rules on fare advertising that the industry opposed.

Delta Air Lines Inc. CEO Ed Bastian said this week that he was excited about the prospect of a Trump administration. He said it might do more to invest in airport infrastructure and limit the U.S. growth of three Middle Eastern airlines that some American carriers accuse of getting unfair government subsidies.

The Justice Department investigation of Delta, American Airlines Group Inc., United Continental Holdings Inc. and Southwest Airlines Co. goes back to June 2015. Regulators asked the airlines for communication they had with each other, Wall Street analysts and major shareholders about passenger-carrying capacity.

Antitrust investigators were concerned that the airlines might have illegally signaled and pressured each other to limit flights and seats in a bid to drive up fares.

The investigation began after several years of rising fares, but the government's case may have been undercut by a decline in prices — caused by too many seats on the market — that had already begun by mid-2015.

Airline representatives said they had not been informed recently about the status of the investigation but expressed confidence in avoiding legal action.

"We have cooperated and are confident DOJ will reach the same conclusion we have — that American has done nothing to violate the law," said American Airlines spokesman Matt Miller.

Delta spokeswoman Elizabeth Wolf said the airline "has always determined our capacity independently and therefore do not expect DOJ to take action."

United and Southwest declined to comment.

An industry official briefed on the matter said the Justice Department had not dismissed the case, but merely left it up to the next administration.

The Wall Street Journal, citing sources familiar with the matter, reported this week that the Justice Department had not found evidence that merited bringing an antitrust case against the airlines. The department did not formally close the matter, however, the newspaper said.


Koenig reported from Dallas.