The US Department of Justice is investigating the pricing practices of airlines as part of an antitrust investigation, the Associated Press (AP) reports.
The AP learned of the inquiry through a document it obtained, which it says indicates the investigation is trying to determine whether airlines have colluded to slow their rate of expansion as part of a scheme to keep airfares high. “A letter received Tuesday by major U.S. carriers demands copies of all communications the airlines had with each other, Wall Street analysts and major shareholders about their plans for passenger-carrying capacity,” says the AP report.
The Department of Justice as well as Airlines For America—the industry’s trade group—did not immediately return Quartz’s requests for comment. (Update, July 1, 3:30pm: Airlines for America tells Quartz in an email “We are confident that the Justice Department will find what we know to be true: our members compete vigorously every day, and the traveling public has been the beneficiary”)
Consolidation in the airline industry has concentrated the majority of domestic flights amongst just four carriers—American, Delta, United, and Southwest—which account for 61% of all domestic revenue passenger miles flown in the 12 months ending March 2015, the most recently available data.
Since the most recent period of consolidation began in 2008, airfares have mostly outstripped inflation. At one point last year they were up 22%, as against an overall rise in consumer prices of 12%, according to the Bureau of Labor Statistics. The increase in airfares is now down to 14%, thanks at least in part to the collapse in oil prices. According to Airlines For America, fuel accounted for 27.6% of operating costs in the last quarter of 2014.