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U.S. Airlines unlikely to face antitrust case on capacity

By Bloomberg
Published: January 11, 2017, 8:52pm

The Justice Department is unlikely to bring an antitrust action against U.S. airlines after finding little evidence the carriers coordinated to raise fares by curbing the supply of seats, a person familiar with the matter said.

The U.S. has been investigating major U.S. carriers at least since the summer of 2015, when some airlines confirmed getting letters from the Justice Department requesting documents about their actions on seating capacity. The availability of seats is closely tied to air fares, because airlines find it difficult to raise prices when capacity exceeds demand.

Investigators didn’t uncover sufficient evidence of collusion among airlines to restrain seats, and it is unlikely the department will pursue any formal action, said the person, who asked not to be named because the probe is confidential. The Justice Department declined to comment.

Analysts were critical of the probe when it became publicly known in 2015, saying that airlines had added more seating capacity than many investors wanted, rather than cutting capacity.

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