American Airlines CEO Denies Claims Of Industry Collusion

While the Department of Justice investigates the possibility that airlines colluded to keep ticket prices high, the top executive at American Airlines is trying to assure his employees that the company did nothing wrong.

The Dallas Morning News reports that Doug Parker, CEO of American Airlines — which recently merged with U.S. Airways — sent a message to employees over the weekend.

“On behalf of your entire leadership team, let me be crystal clear: there has been no illegal behavior on the part of American Airlines,” Parker said in the letter. “We will comply fully with the demands of the [Civil Investigative Demand] and this fact will be proven.”

Last Wednesday, the Dept. of Justice announced it had requested information from airlines as part of an investigation into “unlawful coordination,” but hadn’t specified exactly which airlines were involved.

Parker goes on to tell employees that the airline is unaware what set off the investigation, aside from recent public comments about aircraft capacity.

In fact, he says that capacity with the airline has grown faster than demand in recent years, leading to fares actually falling.

“We at American have definitely answered a number of questions from investors, analysts and the media over the years about capacity,” Parker wrote. “But there is nothing illegal about that – indeed, transparency is rightly expected by all of our external stakeholders.”

American previously faced an antitrust lawsuit related to its proposed merger with U.S. Airways back in 2013. Connecticut Senator Richard Blumenthal cited the lawsuit and consequent findings in a letter sent to the Department of Justice last month calling for an investigation into possible collusion.

While the merger between the two companies eventually went through, Blumenthal says the issues found beforehand are still problematic.

“DOJ’s original complaint painted a stark picture of an extremely consolidated market, in which a few firms wield enormous market power to the detriment of consumers and competition – and in which high-level executives believe there is an unmistakable link between fluctuations in capacity and fares hikes,” he states. “The Justice Department also correctly predicted that this kind of behavior would continue should the merger be allowed to proceed – as it ultimately was.”

Parker said in his letter to employees that the airline hoped that it had reached a resolution with regard to the merger that satisfied the Dept. of Justice concerns.

“So it is discouraging that less than two years later, with traffic and capacity up, and fares down, DOJ still doesn’t seem to acknowledge that the airline industry is as competitive a business as there is in the world,” he wrote.

Parker: ‘There has been no illegal behavior on the part of American Airlines’ [The Dallas Morning News]

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