Last Updated Jul 1, 2015 3:57 PM EDT
WASHINGTON - The U.S. Department of Justice is investigating whether airlines are colluding to slow their growth as part of an effort to keep airfares high.
"We are investigating possible unlawful coordination by some airlines," a spokeswoman for the agency told CBS News. She declined to comment further, including which airlines are being investigated.
The government has requested information from airlines as part of the antitrust investigation, which appears to focus on whether airlines illegally signaled to each other how quickly they would add new flights, routes and extra seats.
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.
American Airlines (AAL), Southwest Airlines (LUV) and United Airlines (UAL) confirmed receiving a letter from the Justice Department in connection with the antitrust probe. All said they are cooperating. JetBlue Airways (JBLU) said it had not been contacted by antitrust authorities.
A trade group representing carriers, Airlines in America, said that industry competition remains strong.
"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, as the DOT's own data shows that domestic fares are down in 2015," the group said in a statement. "It is customers who decide pricing, voting every day with their wallets on what they value and are willing to pay for."
As a result of a series of mergers starting in 2008, American, Delta Air Lines (DAL), Southwest and United now control more than 80 percent of the seats in U.S. skies. During that period, they have eliminated unprofitable flights, filled a higher percentage of seats on planes and made a very public effort to slow growth in order to command higher airfares.
It worked. The average domestic airfare rose 13 percent from 2009 to 2014, when adjusted for inflation, according to the Bureau of Transportation Statistics. And that doesn't include the billions of dollars airlines collect from new fees: $25 each way to check a bag and $200 to change a domestic reservation. During the past 12 months, the airlines took in $3.6 billion in bag fees and another $3 billion in reservation change fees.
All of that has led to record profits for the industry. In the past two years, U.S. airlines earned a combined $19.7 billion.
This year could lead to even higher profits thanks to a massive drop in the price airlines pay for jet fuel, their single highest expense. In April, U.S. airlines paid $1.94 a gallon, down 34 percent from the year before.
But the rapid-fire consolidation has also attracted attention from lawmakers. Sen. Richard Blumenthal earlier this month asked the Justice Department to examine whether airlines are coordinating their activities to keep fares artificially high.
"Consumers are paying sky-high fares and are trapped in an uncompetitive market with a history of collusive behavior," the Connecticut Democrat said in a June 17 letter to Assistant Attorney General William Baer.
A source familiar with Justice's investigation said it has been underway for two months.
Wall Street analysts and airline investors have other concerns. Historically, cheap fuel has led airlines to make money-losing decisions. They would rapidly expand, launching new routes and setting unrealistically low airfares to lure passengers. Airlines that already flew those routes would match the fare, and all carriers would lose money.
"Technology today is so pervasive that airlines can watch what their competitors are doing in real time and make decisions almost instantly that change their level of capacity based on what somebody else is doing," industry analyst John Marks said.
Airline shares fell in the wake of the news initially reported by the Associated Press, with Delta and Southwest off almost 5 percent and American Airlines and United down about 4 percent.
Such price wars are long gone, but today's low fuel costs along with recent comments from airline executives have given the market jitters.
Airline stocks plunged in May after the chief financial officer of Southwest said at an industry event that the carrier would increase passenger-carrying capacity by 7percent to 8 percent, an increase over an earlier target.
Wolfe Research analyst Hunter Keay, who hosted that May 19 conference, told investors in a note afterward that the big airlines are unhappy to be restraining growth while low-cost airlines like Spirit grow at a much faster pace. He urged the major airlines in a note to investors to "step up" and cut routes for the good of the industry.
"This is a Mexican Standoff. Four airlines with guns pointed at each other. Each is afraid to cut suddenly profitable routes because they fear another will backfill that route," he wrote. "Airlines keep those routes under the rationale that it's good for the long term. This is literally the exact opposite of capacity discipline."
On June 1, Southwest CEO Gary Kelly said his airline would cap its 2015 growth at 7 percent. That sparked a rally in airline stocks, as investors were more assured that capacity growth would be limited.
Keay said on Wednesday that he had not been contacted by the government and doesn't think the airlines have been acting inappropriately.
"The analyst community is bringing up the subject. You certainly can't fault an airline executive for responding to the question," Keay said. "The capacity continues to grow at the airports people want to fly to and air travel remains a particular good value for the consumer, especially for the utility that it provides."
Consumer complaints to the U.S. Department of Transportation regarding airlines have risen in recent years amid consolidation in the industry, with four large mergers since 2005.