Feds Probing Possible Airline Collusion That Kept Fares High

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DALLAS (CBS11) - Has there been collusion among the nation's air carriers to boost air fares?

The Department of Justice wants to know and has opened an investigation to find out. The argument is that with recent airline mergers, there's no pressure for them to expand. And they can simply charge us more to set foot on their planes.

"The prices are definitely going up," says Sejal Joshi. He believes with competitive pricing his regular flight to Mumbai, India, should run about $1,500---but Wednesday's is $1,900. "Definitely, I've seen it several years that prices are going up and consolidation brings down the competition."

And he's not alone. Dava Disney was seeing her son off to North Carolina. "There's always a possibility of something like that going on I think. I think when there's a lot of money to be made....there's a lot of particulars that go around that." Lester Disney, agrees. "They've been pretty much the same since I've been in North Carolina, travelling back home."

CBS News reports airline mergers since 2008 mean four major airlines control 80% of U-S passenger seats. "You look at air fares over certain years and certain travel seasons you don't see prices going down especially with gasoline prices going down," according to Daryl Marek of Grand Prairie, who adds, "They're making profits, I see, and it's like, when are the profits going to be cut to the consumers? "

But local air carriers argue the Department of Justice is off base. In a statement to CBS 11 News American Airlines claims "American Airlines has received a Civil Investigative Demand from the Department of Justice Antitrust Division. The CID seeks documents and information from the last two years that are related to statements and decisions about airline capacity. We welcome the review as the data shows that the industry remains highly competitive with more people flying than ever before. Demand has been enabled by a robust and competitive marketplace in which capacity has been added and average fares have decreased. We will cooperate fully with the investigation and demonstrate that the last two years have presented an entirely new competitive landscape that has greatly benefited air travel consumers."

Southwest Airlines echoes, "We'll cooperate fully in answering any questions the DOJ has of us." United Airlines joins American and Southwest in acknowledging a letter from the DOJ... and promising to cooperate with its probe.

The airlines do have support from some travelers. "I think prices are pretty fair," said Harold Hammett of Fort Worth. He believes fares have indeed come down, compared to 20 years ago. But he'd prefer to see more growth. "I'd rather pay slightly more if they had more seats available. That's what worries me, that they're cutting back on the seats."

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