From: ndallen@r-node.gts.org (Nigel Allen)
Subject: U.S. Justice Department Files Price Fixing Suit Against Eight Airlines and Fare Dissemination System
Organization: Echo Beach, Toronto
Date: Tue, 22 Dec 1992 09:02:36 GMT

Here is a press release from the U.S. Department of Justice.

 Justice Department Files Price Fixing Suit Against Eight Airlines
and Fare Dissemination System
 To: Business Desk
 Contact: Gina Talamona of the U.S. Department of Justice,
          202-514-2007

   WASHINGTON, Dec. 21   -- The Department of Justice today 
filed a civil antitrust suit against eight of the largest U.S.
airlines and a data exchange system for alleged price fixing.  The
suit also alleged that the airlines are operating a computerized fare
exchange system in a manner that unreasonably restrains price
competition in the $40 billion domestic air passenger transportation
industry.
   The complaint was filed in U.S. District Court in Washington, D.C.
At the same time, the department filed a proposed consent decree that
would settle the suit against two of the airlines.
   The airlines named as defendants in the civil suit are: American
Airlines Inc. of Forth Worth, Texas; United Air Lines Inc. of Elk
Grove Village, Ill.; Delta Air Lines Inc. of Atlanta, Georgia;
Northwest Airlines Inc. of St. Paul, Minnesota; USAir Inc. of
Arlington, Virginia; Continental Airlines Inc. of Houston, Texas;
Trans World Airlines Inc. of Mt.  Kisco, New York; and Alaska
Airlines Inc. of Seattle, Washington.  The proposed consent decree
would settle the suit against United Air Lines and USAir.
   Airline Tariff Publishing Company (ATP) headquartered in
Chantilly, Virginia, also was named as a defendant.  ATP is an
airline fare data collection and dissemination service owned by a
group of airlines that includes the eight defendant airlines.
   The complaint alleges that beginning at least as early as April
1988, and continuing through at least May 1990, the airline
defendants at various times agreed to increase particular fares and
eliminate particular discounts for travel between specific cities,
so-called "city pairs."
   The complaint also alleged that beginning as early as April 1988,
and continuing to the present, the defendants combined to create and
operate the ATP system in a manner that allowed the airlines to
better coordinate their pricing.
   J. Mark Gidley, Acting Assistant Attorney General in charge of the
Antitrust Division, said, "Using ATP, the airlines were able to
engage in an elaborate dialogue with one another about future fares.
The airlines engaged in a process that involved repeated exchanges
through ATP of price increase proposals and counterproposals, with
the effect of raising fares to consumers.  For example, by using
ATP, airlines communicated the details of proposed fare increases to
competitors and obtained their reactions.  These discussions often
continued until there was an agreement on a higher fare," said
Gidley.
   In particular, the airlines used the first and last ticket date
provisions of ATP to reach agreement on fares.  A first ticket date
is the earliest date the public is permitted to purchase a ticket.
Because the airlines often used future first ticket dates, the fares
were not yet available for sale.  According to Gidley, this aspect of
ATF allowed the airlines to discuss and agree on fares before they
were offered to the public.
   A similar feature of ATP enabled airlines to agree to eliminate
discount fares.  A last ticket date is the last date a particular
fare can be sold to the public.  By using last ticket dates and other
means in ATP, the airlines would negotiate the elimination of
discounts.
   Under the proposed consent decree, the two settling airlines,
United and USAir, would stop using first ticket dates.  The settling
airlines also would stop using last ticket dates, except to advertise
the ending date of a new promotional fare.  The proposed consent
decree also includes prohibitions that prevent the use of other
methods to communicate future pricing intentions and to negotiate
coordinated fare changes.
   For the decree to become effective, the court must approve the
proposed consent decree following expiration of a 60-day comment
period in compliance with the Antitrust Procedures and Penalties Act.
   The antitrust enforcement action is a result of the department's
intensive three-year investigation of airline pricing practices.
 -30-
--