Southwest Agrees to Pay $15 Million Settlement in Price Collusion Lawsuit
Southwest Airlines has agreed to pay $15 million to settle a nationwide antitrust litigation. Passenger have accused the four largest U.S. carriers of conspiracy to raise fares by limiting the number of seats available to customers.
The litigation began in 2015 after the U.S. Department of Justice began probing possible collusion. It has yet to take any formal action. It was filed in New York and Illinois back in and accused Delta, American, United and Southwest airlines of engaging in a “conspiracy to fix, raise, maintain, or stabilize prices of airline tickets through a number of mechanisms.”
The passenger litigation combined more than 100 private lawsuits filed around the country.
Passengers claimed that the airlines’ collusion began in early 2009, led to higher fares and reduced flight choices, and together with low fuel prices and higher fees for checking bags and other services helped the industry post record profits.
A federal judge has now approved a $15 million settlement between Southwest Airlines and members of a class-action lawsuit. Southwest denied wrongdoing but said it settled to avoid the cost and distraction of further litigation. This was a surprising move from Southwest as the other three airlines involved in the lawsuit, American Airlines, Delta Air Lines and United Airlines have also denied doing anything illegal and continue to fight the allegations.
As part of the agreement, Southwest agreed to make the $15 million cash payment and to cooperate in the continuing litigation against the other defendant airlines.
If the court approves the settlement as proposed, members of the proposed settlement Class will include all persons who purchased flights within the U.S., its territories and the District of Columbia from Southwest Airlines between July 1, 2011 and Dec. 20, 2017.
This should be good news for those who fly Southwest often. It’s not yet known what the payout structure will be and claims cannot be filed yet until the court approves the settlement.