Senator Calls For Federal Investigation Into Airline Prices, Data Withholding

When looking to book a flight, many consumers find it easier to peruse third-party comparison sites such as Kayak, Orbitz or Expedia where airfare can be easily compared among different airlines. While airlines have had their share of issues with sites that often lead to some fares disappearing, one legislator is calling for a federal investigation over allegations that some carriers completely withhold information from such travel sites in an attempt to block passengers from finding the best price possible.

Senator Chuck Schumer called on the Department of Justice on Sunday to investigate what he referred to as a withholding practice that one travel group estimates could cost passengers $6 billion a year, The New York Post reports.

The senator from New York claimed that at least two airlines – Southwest and Lufthansa – don’t share price and flight data with third-party sites. Instead, travelers must buy tickets directly from the airlines’ website, eliminating the ability to easily comparison shop.

Southwest has never allowed tickets to be sold on a third-party site, while Frontier announced two years ago that it would no longer allow customers to book tickets on Expedia. Back in May, a group of third-party travel sites claimed Delta had cut them off from seeing such data.

“The ability to bargain shop on these websites … is facing some serious turbulence,” Schumer said. “If we do nothing they might be gone in a year or two. It’s utterly amazing. You call the airline, and the price of a ticket is $500. You go on one of these websites and you can get it for $200 or $199.”

The Travel Technology Association, which represents online travel sites, estimates that such practices affect nearly 40 million passengers each year.

“With less competition in air travel due to carrier consolidation, it is more important than ever that consumers retain the ability to effectively comparison shop,” Steve Shur, president of the travel association, said in a statement.

A group that represents major U.S. airlines – Airlines for America – tells the NY Post that the airfare marketplace has long been set up to allow carriers to choose whether or not they want to sell tickets on their own sites or third-party sites.

“Airlines, like any other company that sells consumer goods, should be able to sell their products where they believe they are best suited for their customers,” Jean Medina, spokesperson for the Airlines for America, said.

This is the second push legislators have made in two recent months to investigate the inner workings of the airline industry.

Back in June, Connecticut Senator Richard Blumenthal called on the Department of Justice to look into supposed collusion and anti-competitive actions between major airlines as a way to keep ticket prices high.

Blumenthal cited a recent report which found some airlines plan to cut back on the number of seats offered on certain routes in an attempt to boost profits.

“In light of the recent unprecedented level of consolidation in the airline industry, this public display of strategic coordination is highly troubling,” Blumenthal stated in the letter.

On July 1, the DOJ announced it had opened an investigation into the industry, saying it had requested information forms several airlines.

A spokesperson for the Department confirmed at the time that the agency was investigating potential “unlawful coordination” among some airlines, but declined to specify which ones.

Just days later, passengers began filing class-action seeking lawsuits against major airlines including Southwest, Delta, American and United, accusing the airlines of a “conspiracy to fix, raise, maintain, or stabilize prices of airline tickets through a number of mechanisms.”

Schumer calls for probe as airlines freeze out discount sites [The New York Post]

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