Reuters logo
UPDATE 2-U.S. finds no proof of airline price-gouging after 2015 train crash
December 15, 2016 / 7:05 PM / a year ago

UPDATE 2-U.S. finds no proof of airline price-gouging after 2015 train crash

(Adds comments from analyst, United)

By Alana Wise

Dec 15 (Reuters) - A U.S. government investigation found no wrongdoing by five U.S. airlines and ended a probe into whether they unfairly manipulated fares after a deadly train crash in May 2015 snarled transportation between New York and Washington.

While fares did increase on many routes after an Amtrak train derailed, prices also decreased in some markets, the U.S. Department of Transportation noted in a letter to the airlines, and posted on its website on Wednesday.

“More importantly, there was no evidence of unfair manipulation of airfares or capacity, nor evidence of unconscionable increases in fares beyond normal pricing levels, in the aftermath of the derailment,” the letter said.

The review involved Delta Air Lines Inc, American Airlines Group Inc, United Continental Holdings Inc , Southwest Airlines Co and JetBlue Airways Corp .

“We are gratified by the decision, and we were confident there would be no finding of wrongdoing by American,” said Matt Miller, spokesman for American, the world’s largest airline.

United, the No. 3 U.S. airline by passenger traffic, said: “We disagreed with the DOT concerns and we are pleased the department found there were no unfair practices.”

Southwest and JetBlue could not immediately be reached for comment. Delta declined to comment.

Airline analyst and former industry executive Bob Mann said that the instances of sometimes-higher fares in the stretch following the crash boiled down to how immediately seats left the market compared with a constant demand for those routes.

“It’s not as if somebody filed a higher price all of a sudden in view of Amtrak’s cease of service,” he said. “I‘m perplexed as to how anybody thinks this is gouging, when in fact, all it is is an extreme case of market clearing.”

The DOT investigation was unrelated to a separate probe by the U.S. Department of Justice into whether the four largest U.S. carriers worked together illegally to keep fares high by signaling plans to limit flights. (Reporting By Jeffrey Dastin and Alana Wise in New York; Editing by Grant McCool and Andrew Hay)

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below